Technical Analysis – Will palladium futures rebound from pandemic lows?
March 23, 2023 2:26 pm
Palladium futures (June delivery) have been trending southwards within a bearish channel since the beginning of November, sliding marginally below the 2020 pandemic low of 1,358 two weeks ago before edging moderately up.
The market maintains a negative trajectory, though the higher high of 1,526 marked on March 14 and the resilience above recent lows are raising optimism for a bullish trend reversal. Yet, the falling exponential moving averages (EMAs) provide little backing to that narrative. In addition to that, the MACD remains negative for the fifth consecutive month, while the RSI continues to fluctuate below its 50 neutral mark.
Also, even though the stochastic oscillator has posted a bullish cross lately, signaling persisting upside pressures, the price will need a clear break above the channel’s upper boundary and the 50-day EMA around 1,450 and 1,526 respectively to boost buying confidence. Then, an extension above the 23.6% Fibonacci retracement of the 2,353-1,328 downtrend at 1,570 could be a prerequisite for a quick rally towards the 38.2% Fibonacci of 1,720.
The 20-day SMA has been another important barrier over the past week, currently capping bullish actions near 1,425. If it holds firm, the focus will shift back to the nearby 1,358-1,328 support region. Should the bears breach that floor, the downtrend could continue towards the channel’s lower boundary seen around 1,220. Even lower, the market could mark a new lower low near 1,100.
Summing up, although the five-month-old downward trajectory seems to have found a bottom, only a durable extension above 1,526-1,570 could confirm that.
Palladium futures (June delivery) have been trending southwards within a bearish channel since the beginning of November, sliding marginally below the 2020 pandemic low of 1,358 two weeks ago before edging moderately up.
The market maintains a negative trajectory, though the higher high of 1,526 marked on March 14 and the resilience above recent lows are raising optimism for a bullish trend reversal. Yet, the falling exponential moving averages (EMAs) provide little backing to that narrative. In addition to that, the MACD remains negative for the fifth consecutive month, while the RSI continues to fluctuate below its 50 neutral mark.
Also, even though the stochastic oscillator has posted a bullish cross lately, signaling persisting upside pressures, the price will need a clear break above the channel’s upper boundary and the 50-day EMA around 1,450 and 1,526 respectively to boost buying confidence. Then, an extension above the 23.6% Fibonacci retracement of the 2,353-1,328 downtrend at 1,570 could be a prerequisite for a quick rally towards the 38.2% Fibonacci of 1,720.
The 20-day SMA has been another important barrier over the past week, currently capping bullish actions near 1,425. If it holds firm, the focus will shift back to the nearby 1,358-1,328 support region. Should the bears breach that floor, the downtrend could continue towards the channel’s lower boundary seen around 1,220. Even lower, the market could mark a new lower low near 1,100.
Summing up, although the five-month-old downward trajectory seems to have found a bottom, only a durable extension above 1,526-1,570 could confirm that.
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