Wheat futures continue holding onto a ledge after breaking out of a Channel Up chart pattern several sessions ago. As the price has proven resilient in the near term, it has also failed to muster any upside gains. This leaves the downside forecast wide open for the market as shown on the Autochartist hourly time frame. A return back inside the channel support would be needed to determine the current move to be a false breakout The initial breach of the channel occurred just above $6.50 per bushel on strong momentum. This set the stage for a move downward to the projected range, but the move has not yet materialized. Instead, the price has shifted into a very narrow sideways trading range. Often enough, the delayed reaction to a breakout is a response to the market hitting another key support level which still holds buying interest of traders. If this buying interest is strong enough to foment a reversal, a quick move higher may then ensue.
Wheat has so far only managed to stall out at this level, suggesting whatever buying interest is holding at the $6.50 area is currently insufficient to move the market higher. This implies the sellers will eventually regain the downside momentum, and press the market back below the $6.31 per bushel target.
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