Wheat futures traded in a narrow range to finish Wednesday’s session at the mid-point of a large Triangle chart pattern, illustrated here on the 240-minute time frame. This pattern has been developing since the major price decline began at the end of August and has now established a solid support level for the price to stabilize.
Wheat tested the support level at $6.15 per bushel on the last swing lower and is now headed towards resistance at the $6.35 level. The apex of the triangle is approaching and will likely force a directional breakout from the pattern in the next several days. The near-term bias is for a correction to the upside; however the longer term outcome may still yield a break of support and another substantial move down below the $6.00 per bushel level.
An rally above $6.40 after a successful test of the triangle resistance would encourage the view that the bottom of this pattern is also the end of the seasonal downtrend caused by the harvest of Northern Hemisphere crops. If the lows are in, this may unfold as a broad trading range between $6.30 and $7.00 a bushel.
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