Soybean: Elliott Wave technical analysis [Video]

Soybean is currently undergoing a correction in its long-term bullish trend. The commodity has seen a significant sell-off, losing over 45% of its value since peaking at 1784 in June 2022. However, this sell-off appears to be in its final stages. The key question now is: how much further could prices fall before a significant reversal occurs?

Long-Term Perspective

Before the decline that began in June 2022, Soybean completed a bullish impulse wave structure starting from May 2019, when prices were at $806. Over the past 26 months, more than two-thirds of those gains have been erased. From an Elliott Wave perspective, this corrective phase is evolving into a three-swing pattern, which is typical of most corrective structures.

Daily Chart Analysis

On the daily chart, the emerging pattern is analyzed from the primary wave degree (circled). Wave A (circled) completed at 1249 in October 2023, and Wave B (circled) ended at 1398 in November 2023. Currently, Wave C (circled) is unfolding to the downside. Within this wave, sub-waves (1) and (2) of 5 (circled) have already been completed, and the price is now progressing in Wave (3). The price has broken below the critical 1,000 level and could potentially drop to 800 before Wave (3) finishes. The current movement is part of Wave 5 of (3), indicating that the bearish phase may not yet be over. In the near term, further selling pressure is expected.

H4 Chart Analysis

On the H4 chart, Wave 5 appears to be in its 3rd sub-wave, labeled as Wave iii (circled) of 5. This suggests that in the near term, Soybean is likely to continue its downward movement, favoring further sell-offs.

Conclusion

Soybean is in the latter stages of a corrective phase following a long-term bullish trend. While the sell-off has been significant, the Elliott Wave analysis indicates that there may be further downside before a major reversal takes place. Traders should be cautious of continued selling pressure in the near term, as the bearish phase may still have some distance to go before a bottom is found.