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Palladium - 16/10/2019

Micro Analysis

16 October, 2019

For General Information only. Not Intended to Provide Trading or Investment Advice. Your Capital is at Risk.

TREND: UP

Fundamental Overview: Palladium gained reaching an all-time high driven by short supplies of the auto-catalyst metal but also was supported with a decrease of the US dollar as optimism over a potential U.S.-China trade reduced the demand for safe-haven instruments. China wants to hold another round of trade talks by the end of October to agree on further details before Chinese President Xi Jinping agrees to sign the trade deal outlined by U.S. President Donald Trump, Bloomberg reported. In the meantime, declining to predict the outcome of this month’s meeting, the Federal Reserve Bank of St. Louis president said his colleagues should think about cutting interest rates again to guard against threats to the economy such as the U.S.-China trade dispute. Together with worse than expected Retail Sales results in September, this statement had a negative effect on US currency which gave additional bust to Palladium price increase.

Technical Overview

After reaching a record high in its price at the beginning of August, the palladium price is in a strong uptrend. All the technical indicators are confirming that for now there are no signs of a possible correction. Stoch, MACD as well as RSI are in the overbought territory in the weekly chart, but it is not clear for how long they can stay here due to the lack of signals of a possible reverse. The price is currently also above all three MA’s (MA (100), MA (50) and MA (20)) which also supports the previous conclusion. If the trend continues and the price move above the pivot line (1717.58), the next target could be Resistance 1 (1793.39). In the opposite scenario, if the price starts to reverse and break below the pivot line, in this case it may go further down to Support 1 (1642.18).


Graph: (Palladium, Weekly)

Pivot Line:

1717.58

Resistance 3:

1964.97

Resistance 2:

1873.19

Resistance 1:

1793.39

Support 1:

1642.18

Support 2:

1546.00

Support 3:

1462.21

Example of calculation based on weekly trend direction for 1.00 Lot*

Palladium

Pivot Points

Resistance 3

Resistance 2

Resistance 1

Support 1

Support 2

Support 3

Profit or loss in $

24,739.00

15,561.00

7,581.00

-7,540.00

-17,158.00

-25,547.00

Profit or loss in €*

22,468.35

14,132.74

6,885.18

-6,847.95

-15,583.17

-23,202.19

Profit or loss in £**

19,780.12

12,441.83

6,061.41

-6,028.62

-13,718.72

-20,426.16

* 1.00 lot is equivalent of 100 units
** Calculations for exchange rate used as of 14:20(GMT +1) 16/10/2019
Fortrade recommends the use of Stop-Loss and Take-Profit, please speak to your Senior Account Manager regarding their use.
*** Please consider closing your position in profit, even if it is lower than suggested one
**** Trailing stop technique can protect the profit – Ask your Senior Account Manager for more details

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