Oil and wheat prices may soon come off again
WTI and Chicago wheat prices are consolidating as traders mull geopolitical tensions and their impact on supplies but may slide again if the technical picture warrants this.
WTI’s bounce off four-month uptrend line running out of steam
WTI's 20% recovery rally from its $92.45 mid-March low is taking a breather as traders evaluate geopolitical tensions and supply issues.
Yesterday’s Dark Cloud Cover on the daily candlestick chart may lead to another down leg being formed in the days to come, provided that a drop and daily chart close below yesterday’s low at $107 occurs today and that no rise and daily chart close above yesterday’s high at $113.21 is made.
Potential downside targets can be spotted between the 24 February high and the 9 March low at $101.18 to $100.09, as well as along this year’s support line at $95 and the $94.04 mid-February high.
In case of a rise above $113.21 and the 4 March high at $114.85 ensuing, however, we would have to allow for the early March peak at $126.74 to come back into the frame.
Wheat prices consolidate but could head down again as traders mull Ukraine situation
Chicago wheat has come off minor resistance and may be slipping back down towards the $10.00 mark as investors assess the impact of the Russian invasion of Ukraine on global wheat supplies.
Yesterday’s rejection by the $11.52 to $11.55 resistance zone, consisting of the 8 March low and 15 March high, led to a Doji being formed on the daily candlestick chart, a fall below which will have negative implications for the price of wheat.
This is to say that a slip below yesterday’s low at $10,95 would push the 11 and 17 March lows at $10.35 to $10.26 as well as the psychological $10 mark to the fore, provided that no rise and daily chart close above yesterday’s high at $11.56 is seen.
This is what typically happens when a spike high such as the one seen on the daily wheat chart occurs, meaning that the first sharp sell-off is followed by a sideways consolidation which usually precedes another leg lower being made.
Such a move could take the price of Chicago wheat back down towards pre-invasion levels of around $7.80 where the 200-day simple moving average (SMA) can be seen.
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