Soybeans Tech Update

Beans have finally broken the major chart formation that bounded the market for months. Prices now test their first key resistance above the formation as trade worries of a head fake. Eyes move to the 50-day moving average and what a close above it could mean for the technicals.   

Two weeks ago, we outlined the major descending triangle formation that beans had been stuck in since March. After petering around the top of the formation for a few sessions, prices finally scored the decisive close above the triangle yesterday. The initial wave of upward momentum pushed prices to the long standing 50-day moving average resistance.

Breaching a four month long descending formation with an 85c higher objective is no small feat but failing at the 50-day just 10c above the triangle would be a major let down. On the flip side closing above the 50-day (something July bean futures have haven’t done since January 15^th) would go a long way in building bullish confidence. Needless to say, the 50-day will be eyed as we finish the week.

Triangle formations always break one way or another. Beans definitely took their time breaking theirs. Now the market sits at a critical juncture, whether to confirm the break or confirm the head fake. Eyes on the 50-day. Stay tuned.