Palladium Price Analysis: XPD/USD justifies Wednesday’s Doji to defend $2,600
|- Palladium snaps three-day downside, recovers from weekly bottom.
- Bulls track gold prices amid downbeat DXY performance.
- US GDP, covid updates eyed for fresh impulse.
Palladium (XPD/USD) rebounds from the weekly top, up 0.34% intraday around $2,615, ahead of Thursday’s European session. The precious metal dropped during the last three days before recently tracking gold prices, also taking clues from the US dollar, to portray the corrective pullback.
With the Fed’s refrain from speaking much on the tapering and US policymakers’ initial voting to discuss another stimulus, US Dollar Index (DXY) dropped to the lowest since July 13, down for the fourth consecutive day. Also weighing on the greenback could be an upbeat earnings season and comparatively stronger covid conditions than Australia, Europe and the UK.
That said, the DXY prints 0.12% losses on a day by the press time, tracking the US Treasury yields and S&P 500 Futures to the south.
It’s worth noting that the US dollar’s weakness directs the safe-haven flows to the gold as covid conditions in Asia-Pacific worsens.
Amid these plays, gold prices refresh one-week high, up 0.45% around $1,815 at the time of the press, the same favors other precious metals, namely silver and palladium to pick up bids.
Moving on, today’s first reading of the US Q2 GDP, expected 8.6% annualized versus 6.4% prior, could offer fresh direction to the XPD/USD prices as any further strengthening of the growth figures could exert additional downside pressure on the DXY and favor metals. Alternatively, a surprise weakness could put a floor under the US dollar declines and trigger the commodity’s pullback.
Technical analysis
Palladium battles the previous support line from June 18 around $2,620 after posting a trend-reversal suggesting candlestick the previous day. Also challenging the bulls is a downward sloping resistance line from July 12, near $2,655. On the contrary, 200-DMA near $2,550 becomes a strong support for XPD/USD bears to conquer before retaking the controls.
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