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    Technical Analysis XPDUSD : 2016-06-09

    Global palladium deficit looming

    Reputed investment bank Societe Generale revised up the projected price for palladium in 2016 from $550 to $575 per ounce and in 2017 from $600 to $700. Previously the British financial group Standard Chartered revised up the forecast for palladium price in Q4 2016 to $660 an ounce. At the same time, it projects the average year price to reach $610 an ounce up from the current $545. Will the palladium price advance?

    In industry palladium is mainly used to produce catalysts for car engines. China raised the import of the metal by almost 45% to 9.35 tonnes in January-April this year compared to the same period of 2015. Prices were relatively small in January-February and the Chinese imports rose 85% and 200% respectively. In April it advanced only 2.2% which made prices retrace. The Japanese car industry may raise demand for palladium in order to increase output as tax hike was postponed for 2-1/2 years. The British Johnson Matthey, world leader in making catalysts, predicts the twofold rise in global palladium deficit in 2016 to 843 thousand ounces from 447 thousand ounces in 2015 году amid the mix of the following factors – palladium is widely used in industry and for investment purposes as a precious metal.

     

    XPDUSD

    On the daily chart XPDUSD: D1 is in mid-term rising trend below its 200-day moving average. Previously it has formed the “double bottom” technical pattern near the support of the channel. The MACD and Parabolic indicators give signals to buy. RSI is above 50, no divergence. The Bollinger bands have widened which means higher volatility. The bullish momentum may develop in case the palladium surpasses the last fractal high and the 200-day moving average at 573. This level may serve the point of entry. The initial stop-loss may be placed below the support of the rising channel, Parabolic signal and the last fractal low at 525. Having opened the pending order we shall move the stop to the next fractal low following the Parabolic and Bollinger signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. The most risk-averse traders may switch to the 4-hour chart after the trade and place there a stop-loss moving it in the direction of the trade. If the price meets the stop-loss level at 525 without reaching the order at 573 we recommend cancelling the position: the market sustains internal changes which were not taken into account.

     

    Position Buy
    Buy stop above 573
    Stop loss below 525

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