Hi Traders! Wheat forecast update and follow up is here. On June 11th I shared this Technical Analysis – Wheat Forecast post in my blog. In this post, let’s do a recap of this setup and see how it has developed now. If you would like to learn more about the way we trade and the technical analysis we use then check out the Traders Academy Club. Spoiler alert – free memberships are available!
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Now let’s summarize the idea first:
- 1 Wheat D1(Daily) Chart Analysis – Important Support zone, Parabolic Sar
- 2 Wheat H4(4 Hours) Chart Analysis – Bearish Trend Pattern, Bearish Divergence, Uptrend Line Breakout, Parabolic Sar
- 3 Wheat H1(1 Hour) Chart Analysis – Bearish Trend Pattern, Bearish Hidden Divergence, ADX Indicator
- 4 Wheat H1(1 Hour) Chart Current Scenario
Wheat D1(Daily) Chart Analysis – Important Support zone, Parabolic Sar
On the daily chart, the price which is moving lower is creating a double wave to the downside. While measuring the fibonacci expansion level of the first wave we have we could see that the price has broken below the first support zone at 61.8% (524.39) fibonacci expansion level, retested it, and is moving lower. The price still has room lower towards the next important support zone at 100% (486.00) fibonacci expansion level. In addition to this based on the Parabolic Sar the dots are above the price which we may consider as evidence of bearish pressure. Also, there are no signs that show the trend is over yet. We may now move down to lower timeframes and see if we can find evidences supporting this bearish view.
Wheat H4(4 Hours) Chart Analysis – Bearish Trend Pattern, Bearish Divergence, Uptrend Line Breakout, Parabolic Sar
On the H4 chart, the price which is moving lower had created a bearish trend pattern that has completed itself. Generally, after a bearish trend pattern we may expect corrections and then further continuation lower. Currently, it looks like the correction that we were looking for has happened in the form of double wave up, we also had a bearish divergence between the first high that has formed at 523.50 and the second high that has formed at 528.25 based on the MACD indicator which we may consider as evidence of bearish pressure. The price then moved lower and broke below the most recent uptrend line and is holding below it. Also based on the Parabolic Sar the dots are above the price we may consider these as other evidences of bearish pressure. So the bottom line here is that the H4 chart has evidence supporting the bearish view.
Wheat H1(1 Hour) Chart Analysis – Bearish Trend Pattern, Bearish Hidden Divergence, ADX Indicator
Looking at the H1 chart we could see that the most recent uptrend line breakout on the H4 chart happened in the form of a bearish trend pattern. We then had a correction with the price creating a bearish hidden divergence between the first high that has formed at 513.75 and the second high that has formed at 508.75 based on the MACD indicator which we may consider as evidence of bearish pressure. In addition to this, the ADX indicator gave bearish signal at the cross of -DI (red line) versus +DI (green line) and the main signal line (silver line) reads value over 25, we may consider this as another evidence of bearish pressure. So based on all this, my view remains bearish here and I expect further continuation lower.
Wheat H1(1 Hour) Chart Current Scenario
Based on the above-mentioned analysis my view was bearish here and I expected the price to continue lower further. On the H1 chart, the price moved lower exactly as I expected delivering a fantastic move to the downside.
So, traders, this is why I wanted to show this example to help you understand how important it is to follow the facts. When the facts do happen as we expected you can see how the price perfectly moved as per the plan. Because these are the kind of hints the market provides us at majority of the times and it’s our obligation as traders to be able to listen to these things that the market tells us and we should try to make the right actions”.
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To your success,
Vladimir Ribakov
Certified Financial Technician
