Bearish clues:
- The general trend has been downward since mid of August 2021
- Wheat has formed a Head & Shoulders pattern (with the 61.8% Fibonacci retracement level as the neckline). This neckline was broken down yesterday with a large amount of volume
- The right shoulder formed a double top
- The volume indicates that sellers took the advantage: when the price dropped, the volume increased / when the price went up (formation of the right shoulder), the volume decreased
- The price of wheat has broken the 100 exponential moving average
Fundamental news:
- Take profit by investors after last week's rise
- Hurricane Ida caused the closure of several ports on the Atlantic coast, through which soybeans and corn are exported. Wheat has been dragged into the downward spiral of these commodities
- StatCan released low Canadian wheat production numbers (- 34.8% compared to last year) but higher than expected
- Spring wheat harvest is progressing is the United States of America (88% done VS. 71% historically at this date)
- Oil price remains low
Objectives:
Wheat could first decrease to the $7.00/bu level (support and 50% Fibonacci retracement level). And then maybe to the $6.80/bu level (support and 38.2% Fibonacci retracement level) or will rebound on the support levels and will go up again if there are more positive news on Chinese imports and bad news on US harvest. Last objective is between $6.60/bu (theoretical objective of the Head & Shoulders pattern) and $6.50/bu (support)
Feel free to share, comment and give your opinion if it is constructive ;)
DISCLAIMER: This is not investment advice
- The general trend has been downward since mid of August 2021
- Wheat has formed a Head & Shoulders pattern (with the 61.8% Fibonacci retracement level as the neckline). This neckline was broken down yesterday with a large amount of volume
- The right shoulder formed a double top
- The volume indicates that sellers took the advantage: when the price dropped, the volume increased / when the price went up (formation of the right shoulder), the volume decreased
- The price of wheat has broken the 100 exponential moving average
Fundamental news:
- Take profit by investors after last week's rise
- Hurricane Ida caused the closure of several ports on the Atlantic coast, through which soybeans and corn are exported. Wheat has been dragged into the downward spiral of these commodities
- StatCan released low Canadian wheat production numbers (- 34.8% compared to last year) but higher than expected
- Spring wheat harvest is progressing is the United States of America (88% done VS. 71% historically at this date)
- Oil price remains low
Objectives:
Wheat could first decrease to the $7.00/bu level (support and 50% Fibonacci retracement level). And then maybe to the $6.80/bu level (support and 38.2% Fibonacci retracement level) or will rebound on the support levels and will go up again if there are more positive news on Chinese imports and bad news on US harvest. Last objective is between $6.60/bu (theoretical objective of the Head & Shoulders pattern) and $6.50/bu (support)
Feel free to share, comment and give your opinion if it is constructive ;)
DISCLAIMER: This is not investment advice
Trade closed: target reached:
Target at $7.00/bu and $6.81/bu reached