Wheat took a hit yesterday along with other agricultural commodities. While there was some negative news for corn (risk of China cancelling orders), there was not any news for wheat. having said that, wheat may have dropped on the back of profit taking as the commodity has been strongly overbought following recent gains.
Taking a look at the WHEAT chart, we can see that sell-off has been halted in the 690 area, where previous local highs can be found. Commodity began to recover later on and now price is approaching the 127.2% exterior retracement of the correction launched in late-January, that also coincides with local lows from the end of April. Pushing above this hurdle would pave the way for a retest of recent highs in the 750 area. On the other hand, should the downward move resume and deepen, key support can be found at the 78.6% retracement (672 area), where the lower limit of the Overbalance structure can be found.
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Source: xStation5
