Commodities

Technical Analysis – Palladium futures sellers surface putting pressure on the ascent

Posted on January 9, 2020 at 1:42 pm GMT

Anthony Charalambous, XM Investment Research Desk

Palladium futures sellers have emerged after the recent rally, which bounced off the 50-day simple moving average (SMA) at 1783 and stretched the commodity above the upper-Bollinger band plotting a fresh all-time-high of 2111.23.

The upward sloping SMAs continue to paint an improving positive picture as do the technical indicators. That said, the slight decline in the RSI – in the overbought territory – suggests a slight weakening in the existing bullish view cautioning for a pullback towards the mid-level of the Bollinger band.

To the upside, if buyers drive the price higher again, the fresh peak of 2111.23 could test their efforts to jump towards the 2150 resistance. Climbing further, the 2200 barrier may come into play and if overrun, the commodity could see the 2280 resistance, which is the 261.8% Fibonacci extension level of the down leg from 1972 to 1783.

If sellers manage to stay in the game guiding the price back below the upper-Bollinger band at 2040, the inside swing high of 1972 could be next to apply pressure to the drop. Falling lower, the mid-Bollinger band at the support of 1916 could obstruct the descent from reaching the 50-day SMA at 1825. Beneath this, the lower-Bollinger band and swing low of 1783 may bring the correction from the high to a halt.

Overall, the short- and medium-term bias continue to appear bullish. However, a shift below 1916 may aid a near term descent, while a break below 1783 would confirm a bearish move.

commodities Pall

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