Commodities

Technical Analysis – Palladium futures’ aggressive drop halted near 100-SMA and 50.0% Fibonacci; price moves inside Ichimoku cloud

Posted on August 1, 2019 at 2:39 pm GMT

Anthony Charalambous, XM Investment Research Desk

Palladium futures’ struggle with the 23.6% Fibo of 1517 finally came to an end, after a two-week period. The metal collapsed through the 1467 support level, which is the 38.2% Fibo retracement level of the move up from 1255 to 1598, and the 1454 near support, to break into the Ichimoku cloud. Presently the metal is faced with the 100-day simple moving average (SMA) barrier which is parallel with the 50.0% Fibo of 1426.

The 20-day SMA has started to turn down, whereas the Tenkan-sen is already headed south indicating the short-term downwards momentum is picking up. Moreover, the MACD is below its red trigger line and is approaching the negative territory, whereas the RSI is declining towards the oversold areas. The ADX indicates a short-term weak trend in place.

If selling interest endures the price of the metal could find support at 1385, which is the 61.8% Fibo, followed by the 1371 level, before tackling the barrier zone of 1340 – 1336, where the 200-day SMA and 76.4% Fibo reside.

To the upside, the 100-day SMA and the Ichimoku cloud would need to hold, and an initial race up above the 1556 swing peak, could see price advance to test the highs of 1574 and 1598. Violation of these highs could cause the areas around the 1700 resistance hurdle to unfold.

Overall a close below 1426, would energize the short-term negative direction, but a close below the four-month low of 1255 would cement the bearish bias sentiment.

commodities Palladium Futures

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