Palladium Strikes Fresh All-time Highs Despite FMI's Growth Outlook


The IMF said Tuesday that the trade war would reduce global growth to its lowest level since the 2008 financial crisis. The international body added that the projections could worsen if the conflict remains unresolved.

The organization, in its latest publication of global economic outlook, lowered the projection of GDP growth from 2019 to 3.0%, below the 3.2% forecasted in July.

In the published report, the International Monetary Fund explains the impacts of the trade war in the global economy. The IMF mentions effects on direct costs, raising uncertainty in markets, reduced investment, low productivity, among other factors.

In this context of global deceleration in growth and consumption, we highlight the increase in the price of palladium. On Tuesday, The metal that is used in the automotive sector to reduce emissions reached a new all-time high. The palladium price touched $ 1,741.67 per ounce. During this year, the price of this metal increased over 40% (YTD).

 

Technical Overview

Palladium, in its big-picture, represents a five-waves sequence which could be topping. The long-term channel (dashed line) shows the strong bullish bias of this market.

Palladium

In the daily timeframe, we observe the metal moving in an active bullish cycle. Palladium could be developing a wave (3) in a blue degree, which at the same time could be running in a wave 5 labeled in black.

Palladium

The bullish trend will remain sound while the metal remains above $1,432 per ounce. In the long-term, Palladium could retrace to the $1,450 zone before bouncing off and visit a new all-time high.

The next chart corresponds to the metal in its 8-hour timeframe. The figure illustrates that the bullish trend is intact. The current fifth wave could end near the $1,750 level.

Palladium

In the near-term, we think a decline to the $1,685 level is likely, with a potential bearish extension until the zone of $1,650 per ounce.

From the latest Commitment of Traders report, institutional traders reported an increase of 5.01% of long positions. This advance represents 82.41% of bullish positioning on the speculative side. On the seller-side, institutional traders informed on the CFTC report a marginal reduction of 0.81% in its shorts.

The weekly variation allowed us to detect a bullish pressure for Palladium. However, we have to consider that big traders hold 82.41% of longs, and the 13- weeks average is 79.05%. This difference makes us assume a profit-taking activity. In consequence, our preferred position is neutral for this market.

 


 

100% Anonymous Trading on EagleFX - Trade NOW!

Risk Warning: CFD and Spot Forex trading both come with a high degree of risk. You must be prepared to sustain a total loss of any funds deposited with us, as well as any additional losses, charges, or other costs we incur in recovering any payment from you. Given the possibility of losing more than your entire investment, speculation in certain investments should only be conducted with risk capital funds that if lost will not significantly affect your personal or institution’s financial well-being. Before deciding to trade the products offered by us, you should carefully consider your objectives, financial situation, needs and level of experience. You should also be aware of all the risks associated with trading on margin.

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!


Latest Forex Analysis

Editors’ Picks

EUR/USD: Bulls in control above 1.1100 starting out ECB week

Following the bounce from near 1.1100 in early Asia, EUR/USD has entered a phase of consolidated near 1.1140 region ahead of the European open. Bulls await a fresh impetus for the next push above the 1.1150 mark ahead of Eurozone/ US PMIs.

EUR/USD News

GBP/USD recedes from three-week top above 1.2400, UK Manufacturing PMI eyed

GBP/USD prints three-day winning streak amid broad US dollar weakness. Calls of further help to British employees add to the upside momentum. Downbeat Brexit headlines confront the UK’s coronavirus optimism. The UK/US PMIs will join qualitative catalysts.

GBP/USD News

Trump tenderness, China's Caixin, boost Asia

Asia is off to a rollicking start to the week with equities performing strongly and currency markets rotating out of haven US Dollars. The turbocharging of bullish sentiment this morning has multiple drivers starting with President Donald Trump. 

Read more

Gold: Teasing a rectangle breakout, $1750 in sight

Gold bulls gathering pace for the next push higher. The extension of last week’s rally in the yellow metal is mainly driven by the sell-off in the US dollar across the board, in the wake of US-China trade war relief and escalating US riots.

Gold News

WTI: Overbought RSI challenges the bulls above $35.50

WTI seesaws around 7-week-old resistance line, retreats from highest since March 11. A short-term ascending trend line on the bears’ radars during the pullback. 100-day SMA, 61.8% Fibonacci retracement together offers strong upside barrier.

Oil News

Forex Majors

Cryptocurrencies

Signatures