Wheat Elliott Wave Analysis - bearish trend in the final stage

Wheat Elliott Wave Technical Analysis

Function - Counter-trend

Mode - Corrective

Structure - Zigzag

Position - Blue wave b of black wave Y

Direction - Downwards for Blue Wave c of black wave Y

Wheat's recent price movements have underscored a persistent downward trend that has gripped the market since 2022. However, amidst this bearish momentum, indications suggest that we might be approaching a pivotal juncture. The breach below a crucial support level, notably around $553, signifies a potential turning point for traders. This development hints at the possibility of a significant bullish correction looming around the $500 mark.

Analyzing the Elliott wave perspective provides further clarity on this scenario. The daily timeframe reveals a distinct pattern of a bearish impulse wave originating from 1363 in March 2022. This impulse wave, delineated by the sequence 1-2-3-4-5 (circled in blue), appears to be reaching its terminal phase. The fifth wave exhibits characteristics of an ending diagonal, denoted as wave (5), indicating an imminent shift in market sentiment. As per Elliott wave theory, a forthcoming 3-wave bullish correction is anticipated, potentially initiating a rally that could surpass previous bounces observed during the two-year downtrend.

Gold (XAUUSD) 4Hr Chart Analysis

Zooming into the H4 chart unveils the sub-wave structure of wave (5). Commencing at the pivotal 650 level, where wave (4) concluded, wave (5) unfolds into a double zigzag pattern. Wave X of (5) terminated at 605, marked by a triangular formation, while sub-wave 'a' (in blue) concluded at 553. This sets the stage for the subsequent corrective wave 'b,' with the ongoing wave 'c' exhibiting a distinct downward trajectory. Further downside movement towards the 500-510 zone is anticipated from this point.

In summary, the exhaustive two-year bearish trend in Wheat appears to be approaching its climax, with the final leg gravitating toward the $500 threshold. Traders should remain vigilant for potential opportunities as a substantial bullish correction is poised to unfold, potentially signaling a paradigm shift in market dynamics.

Technical Analyst: Sanmi Adeagbo

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