Technical Analysis – Palladium futures push to a new all-time peak

Anthony Charalambous, XM Investment Research Desk

Palladium futures plotted a new all-time high of 1617.03 as the bulls surpassed the previous peaks from March 21 and July 11. However, the sellers have emerged and have frozen all short-term efforts of a climb higher, something which is also reflected in the momentum indicators.

The MACD although in positive areas and above its trigger line, has flattened out, while the RSI has deflected off the 70-level and heads down. Despite this, the bigger positive picture from the simple moving averages (SMAs) suggests that the rally may return, as the 20- and 50-day SMAs have completed a bullish cross.

If sellers manage to push below the 1574 support, the price of the metal could find some hindrance in the decline at the 20- and 50-day SMAs around the 1520 and 1500 handle. Surpassing them, the 1455 support comes next, coupled with the 100-day SMA. Overcoming 1455, the 1400 obstacle where the 200-day SMA lies could apply some pressure, ahead of the swing low of 1375.

On the other hand, given that 1574 holds and buying orders pick up shoving the price past the high of 1617.03, then the 1695 zone may come into play, which is the 138.2% Fibonacci extension of the down wave from 1574 to 1255. If the bulls dominate, the 1773 resistance level may draw some light, this being the 161.8% Fibo extension.

Overall, the short-term bullish bias would be reinforced above the new peak of 1617.03. For the bias to turn neutral-to-bearish the metal would need to close below 1375.