Palladium Faces Selling Pressure as Prices Breach Key Support Levels
Friday Market Overview:
The palladium market is grappling with a complex interplay of reduced automotive industry demand due to the shift towards electric vehicles, geopolitical supply risks, and broader economic challenges stemming from the Ukraine-Russia war. These factors are likely to contribute to ongoing price volatility in the near term. Overall, price fluctuations between $1100 and $800 are expected throughout 2024, with declining demand exerting a more pronounced downward pressure on prices.
Technical Analysis:
Palladium has retraced from its recent high of 1010.38 after hitting its long-term descending trendline, forming upper shadows on the daily chart. This bearish pattern, marked by a shooting star, has driven prices below the key support at 971.38, reaching a new weekly low. The ongoing bearish momentum has set the immediate target at 960.77, with further declines potentially pushing the price past the 34-day moving average to 947.28 and 932.38. The MACD histogram bars crossing below the signal line and the RSI dropping from near 70 to neutral territory indicate waning buyer strength and increased selling pressure.
Alternative Scenario:
If buyers regain control, a reversal could target the resistance levels at 986.28 and 1010.38. Breaking above this resistance is crucial for establishing a new bullish trend.
Key Levels:
Resistance Levels:
- Resistance 3: 1010.38
- Resistance 2: 986.28
- Resistance 1: 971.38
Current Price (at the time of analysis): 965.38
Support Levels:
- Support 1: 960.77
- Support 2: 947.28
- Support 3: 932.38
Impactful Events:
The upcoming release of the New Foreign Direct Investment in the United States (2023) data, scheduled for July 12, 2024, at 8:30 AM ET, will provide insights into foreign investment trends in the US. This data could influence market sentiment and broader economic conditions affecting industrial and precious metals like palladium.
Oscillators and Risk Warnings:
RSI (Relative Strength Index): Neutral, indicating balanced market conditions.
MACD (Moving Average Convergence Divergence): Neutral, signaling potential for further declines.
Moving Averages: Bearish, reflecting the current negative price action.
Conclusion:
Palladium is under significant selling pressure after breaking key support levels, driven by a combination of reduced demand, geopolitical risks, and broader economic challenges. The immediate target for further declines is 960.77, with potential moves towards 947.28 and 932.38 if the bearish momentum continues. However, a reversal targeting 986.28 and 1010.38 is possible if buyers regain control.
Investors should monitor the upcoming US foreign direct investment data and broader market sentiment for further insights. Keeping an eye on these key events and technical levels will help traders navigate the current market environment effectively.
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