Wheat Elliott Wave technical analysis [Video]

Wheat Elliott Wave analysis

Wheat resumes long-term bearish trend, approaching multi-year lows

Wheat extended its long-term bearish cycle in February, aligning with the broader trend that has persisted since March 2022. The commodity remains vulnerable to further declines and is on track to break the July 2024 low, potentially reaching price levels not seen since 2020. 

However, the downside could be limited as the current structure suggests an impending completion of the bearish cycle, setting the stage for a corrective recovery. 

Once the decline exhausts, wheat is likely to experience a multi-month bullish retracement correcting the broader sell-off.

Daily chart analysis: Ending diagonal near completion

On the daily timeframe, the decline from March 2022 has unfolded as an impulse, with wave ((A)) taking shape as a five-wave sequence. The final leg of this wave, wave (V), is developing as an ending diagonal, a structure that often signals a terminal phase of a trend. This suggests the current downtrend may soon reach exhaustion.

Wave V of (V) commenced in May 2024 and is now progressing through its final stages. Given the nature of diagonals, a final decline is still likely before a larger correction begins. A key support zone exists around the $500 level or slightly below. 

If the price reaches this area and structural confirmation aligns, traders should anticipate the beginning of a corrective rally, retracing a portion of the four-year downtrend.

H4 chart analysis: Final leg of wave V unfolding

On the H4 timeframe, wave V of (V) of ((A)) appears to be progressing within an ending diagonal. Currently, wave (4) of ((C)) of V is in development, likely requiring one more minor push higher before the final drop occurs. If the diagonal completes as projected, wave (5) should take prices below $500 before a corrective bounce unfolds.

However, if the structure invalidates and the price impulsively extends downward, a sharper decline below $500 could occur before the anticipated reversal. Traders should monitor for a structural confirmation before positioning for the next significant move.

Technical analyst: Sanmi Adeagbo.

Wheat Elliott Wave analysis [Video]