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Wheat Elliott Wave Analysis - bearish trend in the final stage

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 action has seen a significant breach below a crucial support level, indicative of the continued downward trajectory that has persisted since 2022. However, within this bearish momentum, signs suggest that we may be approaching the culmination of this trend. There's a strong possibility of a pronounced bullish correction looming around the $500 mark. Notably, the breach below $553 serves as a potential confirmation signal for traders to capitalize on selling rallies as the price heads towards $500. Let's delve deeper into the Elliott wave analysis to illuminate this scenario.

Examining the daily timeframe reveals a discernible pattern of a bearish impulse wave originating from 1363 in March 2022, delineated by the sequence 1-2-3-4-5 (circled in blue). Significantly, the fifth wave appears to be forming an ending diagonal, denoted as wave (5), indicating the terminal phase of this impulse pattern. Following Elliott wave theory, a forthcoming 3-wave bullish correction is anticipated. This projection suggests that in the ensuing weeks, Wheat could initiate a rally, potentially more substantial than any witnessed during the preceding two-year downtrend. While conventional analysis might interpret this as merely another temporary bounce before further decline, the Elliott wave perspective offers a contrasting outlook, anticipating a significant shift in market sentiment.

Zooming into the H4 chart provides insight into 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. Notably, wave X of (5) terminated at 605, characterized by a triangular formation. Subsequently, wave Y has progressed as anticipated, with sub-wave 'a' (in blue) culminating at 553, serving as a launching pad for the ensuing corrective wave 'b,' and the ongoing wave 'c' manifesting a distinct downward trajectory. From this juncture, further downside movement towards the 500-510 zone is envisaged.

In summation, the exhaustive two-year bearish trend seems to be nearing its culmination, with the final leg gravitating toward the $500 threshold. A substantial bullish correction is poised to ensue, marking a potential paradigm shift in market dynamics.

Technical Analyst : Sanmi Adeagbo

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