Wheat Elliott Wave analysis
Since reaching its peak in March 2022, Wheat prices have experienced a dramatic decline, plummeting nearly 61% from over 1360 to the current level of approximately 540. This significant downturn reflects a prolonged bearish cycle that has persisted for over 28 months. However, based on Elliott Wave analysis, this bearish phase appears to be approaching its conclusion, signaling the potential onset of a multi-month bullish phase. This anticipated upward movement could serve as a corrective phase, counterbalancing the extended period of selling pressure.
Daily chart analysis
Examining the daily chart, the downtrend from the March 2022 high of 1364 has been characterized by a well-defined impulse wave structure. This structure is now in its final stage, with the fifth wave nearing completion. The fifth wave, which began in May 2024, is currently forming what appears to be an ending diagonal pattern—a common pattern in the final stages of an impulse wave. The development of this diagonal suggests that the decline is losing momentum, and a reversal could be imminent. However, it's important to note that Wave (5) might still evolve into a three-swing structure before fully completing. This implies that while Wheat prices could dip further, potentially reaching the 500 level or slightly below, the ongoing rebound could see prices rise to the 560-590 range before the sell-off resumes. This price action would align with the typical behavior of an ending diagonal, where a final push lower is often followed by a significant corrective rally.
Four-hour chart analysis
The H4 chart offers a closer examination of the sub-waves within Wave (5) of the diagonal structure seen in Wave 5 (circled) on the daily chart. This wave is expected to complete a corrective three-wave structure. The initial sub-wave, Wave A, has seemingly completed a bearish impulse move from the peak in May 2024. Following this, the current bounce from the July 2024 low is identified as Wave B, which appears to be forming a corrective pattern. Early indications suggest that Wave B is developing into a double zigzag pattern, a complex correction often seen in Elliott Wave analysis. As long as the low from August 27th remains intact, Wave B could extend higher, potentially offering a short-term rally before the broader downtrend continues. This scenario underscores the importance of monitoring key support levels, as a breach of the August 27th low could invalidate the current corrective pattern and suggest further downside risk.
In summary, while the long-term downtrend in Wheat may still have room to run, the market is showing signs of nearing a significant bottom, with the potential for a multi-month bullish correction on the horizon.
Wheat Elliott Wave technical analysis [Video]
As with any investment opportunity there is a risk of making losses on investments that Trading Lounge expresses opinions on.
Historical results are no guarantee of future returns. Some investments are inherently riskier than others. At worst, you could lose your entire investment. TradingLounge™ uses a range of technical analysis tools, software and basic fundamental analysis as well as economic forecasts aimed at minimizing the potential for loss.
The advice we provide through our TradingLounge™ websites and our TradingLounge™ Membership has been prepared without considering your objectives, financial situation or needs. Reliance on such advice, information or data is at your own risk. The decision to trade and the method of trading is for you alone to decide. This information is of a general nature only, so you should, before acting upon any of the information or advice provided by us, consider the appropriateness of the advice considering your own objectives, financial situation or needs. Therefore, you should consult your financial advisor or accountant to determine whether trading in securities and derivatives products is appropriate for you considering your financial circumstances.
Recommended Content
Editors’ Picks
![EUR/USD stays below 1.1100, looks to post weekly losses](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/EURUSD/european-euro-coin-on-top-of-american-dollar-bill-11292130_XtraSmall.jpg)
EUR/USD stays below 1.1100, looks to post weekly losses
EUR/USD continues to trade in a narrow range below 1.1100 and remains on track to end the week in negative territory. Earlier in the day, monthly PCE inflation data from the US came in line with the market expectation, failing to trigger a reaction.
![GBP/USD struggles to find a foothold, trades near 1.3150](https://editorial.fxstreet.com/images/Markets/Currencies/Majors/GBPUSD/iStock-157771037_XtraSmall.jpg)
GBP/USD struggles to find a foothold, trades near 1.3150
GBP/USD stays on the back foot and trades in negative territory at around 1.3150 on Friday. The US Dollar holds its ground following the July PCE inflation data and doesn't allow the pair to stage a rebound heading into the weekend.
![Gold retreats toward $2,500 ahead of the weekend](https://editorial.fxstreet.com/images/Markets/Commodities/Metals/Gold/gold-bars-50657756_XtraSmall.jpg)
Gold retreats toward $2,500 ahead of the weekend
Gold stays under modest bearish pressure and declines toward $2,500 in the American session on Friday. The 10-year US Treasury bond yield edges higher toward 3.9% after US PCE inflation data, causing XAU/USD to stretch lower.
![Week ahead – Investors brace for NFP amid Fed rate cut speculation](https://editorial.fxstreet.com/images/Macroeconomics/EconomicIndicator/Employment/NFP/america-back-to-work-gm178972493-25143312_XtraSmall.jpg)
Week ahead – Investors brace for NFP amid Fed rate cut speculation
Here comes another NFP week, with investors eagerly awaiting the results as they try to discern the size and pace of the Fed’s forthcoming rate cuts. The weaker than expected July numbers triggered market turbulence, instilling fears about a potential recession in the US.
![Easing Eurozone inflation to back an ECB rate cut in September](https://editorial.fxstreet.com/images/Macroeconomics/Countries/Europe/Eurozone_countries/Eurozone/eu-flags-flying-at-the-european-commission-building-brussels-belgium-24759579_XtraSmall.jpg)
Easing Eurozone inflation to back an ECB rate cut in September Premium
Eurostat will publish the preliminary estimate of the August Eurozone Harmonized Index of Consumer Prices on Friday, and the anticipated outcome will back up the case for another European Central Bank interest rate cut when policymakers meet in September.
![Moneta Markets review 2024: All you need to know](https://editorial.fxstreet.com/images/IT/Testing/Review/FXSBadgeCertifiedBackg_XtraSmall.png)
Moneta Markets review 2024: All you need to know
VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.