The current action on the dollar index acts as confirmation that the 81 level is strong resistance. From here we can expect the dollar to weaken to 77. This will be bullish for shares.
The CBOT wheat price is showing very positive signs. We had the break above the resistance, at line -1-, at the beginning of December. Now the price came back to test, and confirm that level at 7.50 as support (at the red arrow). That means that the buyers are seeing value at the level where the sellers were in control since August.
The next level where we can expect the sellers to be in control again is the 9.50 level at line -2-.
We see the current setup as a buying opportunity. That implies that local farmers who sold their crops, can now buy it back by implementing an option strategy. Farmers who have not sold their crops, can wait for the 9.50 level on CBOT for the next opportunity to sell.
The local wheat price broke resistance at 2800 to complete the consolidation pattern between 2560 and 2800 that started in August. The next target is 3100.
