Palladium prices have come under renewed pressure and have been dragged down to new cycle lows, with several analysts now closely monitoring to see whether the precious metal will find its footing.
Hedgeye, in a chart posted, noted the precious metal had shed 8.3% in the past month and remained “uninspiring in PALL terms.”
Meanwhile, the daily price action in palladium now shows the metal is treading close to a major horizontal support level, and analysts will be looking to see if the price can hold here or if another bearish break is in the offing.
Palladium Holds Near Support
Looking at Palladium’s latest chart structure, the precious metal appears to be resting just above a major horizontal support region after several weeks of relatively weaker action. In its analysis of the precious metal, Hedgeye said that palladium had ‘crashed’ 8.3% this past month as the price has established new cycle lows.
The chart by Hedgeye showed the price having declined from above $2,000 earlier this year down to its latest level around the $1,346.00 region. While there was an attempt to recover this support in March and April, each bounce has been rejected.
The pattern thus far indicates that sellers remain in firm control of the underlying market trend and that the bears continue to create lower highs, while attempts to buy the dips have not been able to rally the price much beyond the vicinity of old resistance areas.
The chart suggests that the recent price action in palladium could very well mean the price is now testing a decision point. If support can hold price at its current levels, this may temper the selloff, but a breach beneath current lows would bring bearish momentum to the forefront.
Bearish Continuation Pattern Develops
$Trader warned in a recent note that Palladium is currently printing another “bear flag continuation candle right above support.” The analyst also highlighted that the price remains below a “descending trend resistance, 50-day MA, 200-day MA.”
The X chart presented by the analyst showed Palladium’s price structure taking the form of a descending triangle with resistance slanting downwards from previous highs and a support level remaining flat at current levels.
A confirmed break beneath this would suggest that the trend is likely to continue lower. The chart itself shows price approaching the bottom of the pattern, while sellers continue to offer resistance above the current price, limiting the opportunity for any buyer momentum to rally palladium above current levels. But for traders watching for continuation, this comes back to the key support region, with an added consideration of price and volume breaking that level.
$1,220 Becomes Key Downside Level
Other analysis from Ian Cooper has highlighted that palladium is currently “underwater” on the day despite looking mostly sideways in price. He sees a bear flag setup just above support, much like what’s been seen on the silver charts of late.
Cooper has identified nearby support near the $1,347 level and also a major lower support region near the $1,220 mark, stating he will be “looking for buying interest at $1,220.” Below $1,220, there is further support at $1,164 and $1,107, but Cooper indicated this may only become relevant if selling pressure increases significantly.
On the upside, Cooper notes resistance levels are well above the current price, placing resistance at $1,600 and $1,646, with a much higher level above $2,000. He commented that Palladium would need to reclaim current support and then work above recent consolidation ranges before moving to either resistance area.
Overall, the daily setup remains bearish, with traders on the lookout for palladium to break its current support and fall towards $1,220 or for a rally from support that could eventually see the price consolidate above resistance regions.