Technical Analysis – Palladium futures at fresh record high; approach 2-year old resistance line

Christina Parthenidou, XM Investment Research Desk

Palladium futures edged up on Friday to unlock a fresh record high of 1,815 but room for improvement seems to be narrowing as the price is approaching the 2-year old resistance line. Moreover, the RSI is not far below its 70 overbought mark and the Stochastics have already run above 80 and are looking to post a bearish cross above the 80 mark.

Should buyers persist, breaching the resistance line currently around 1,835, the focus will initially shift to the 1,900 psychological level and then somewhere near the 1,950 level.

Failure to close decisively above the resistance line could drive the price near the 20-day simple moving average currently around 1,732. Beneath that, the 1,655 level could next take control, while slightly lower the 1,595-1,560 area could be of bigger interest since any significant violation at this region would push the price below the ascending trendline drawn from the 2018 low of  812.70.

In short, palladium futures are viewed as cautiously bullish. Still, only a sell-off below 1,560 would eliminate the positive outlook.