Palladium Price Analysis: XPD/USD sellers brace for Jerome Powell around $2,750

Palladium (XPD/USD) remains sidelined, around $2,762, following the early Asian session drop from $2,772.25 on Wednesday. In doing so, the precious metal reverses the previous day’s recovery moves from a weekly low while printing 0.13% intraday loss by the press time of the pre-European session.

The commodity prices recently eased on the alleged order from China to limit overseas commodity exposure.

Earlier in the day, the market’s cautious sentiment ahead of the US Federal Open Market Committee (FOMC) meeting joined fears of escalating Sino-American tussles weighed on the Palladium prices. However, fears of Fed’s surprises and a lack of major catalysts elsewhere keep the quote’s downside limited.

China’s Industrial Production and Retail Sales for May can offer immediate direction to the bright metal. Industrial Production is expected to ease from 9.8% to 9.0% YoY whereas Retail Sales growth could drop to 13.6% versus 17.7% previous readouts.

Although downbeat forecasts for China may keep sellers hopeful, Palladium traders should pay attention to today’s Fed dot-plot and Chairman Jerome Powell’s speech for clearer direction. While the Fed isn’t expected to alter the current monetary policy, hints of tapering and/or more FOMC members’ support for a rate hike in 2023 could strengthen the US dollar and weigh on the Palladium prices.

Read: Fed Interest Rate Decision Preview: Chair Powell will determine market response

Technical analysis

Palladium prices hold lower ground following a downside break of an ascending support line from March 29. However, a two-month-old horizontal area surrounding $2,727-26 becomes the key for short-term traders. Meanwhile, corrective pullback beyond the previous support, around $2,803 needs to cross the five-week-long resistance line near $2,810 to confirm recovery moves.