A continuation of the bullish weather across the US growing regions over the weekend helped to set a bullish technical pattern in motion for the wheat market. Monday's session saw short-covering at the open to propel the market higher, closing in the middle of the day's range but ultimately above a key breakout point.
Wheat futures have formed a Triangle chart pattern, shown here on the hourly candlestick chart, to establish a possible launching point for another weather-driven rally above towards the $7.00 per bushel level. Monday's breakout above the top border of the triangle has given the momentum buyers a green light for playing a move in that direction, which could set the tone for higher trade through the rest of the week.
The technical breakout from this Triangle chart pattern projects a price target between $6.95 and $7.03 per bushel, which would place the market in a good position for a new rally towards $7.50 if successful. A close back into the underside of the resistance provided by the triangle would diminish the likelihood of the pattern completing, however the overall strength of the grain complex going into Tuesday would suggest some follow-through buying is likely.
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