Palladium: Waiting for a Terminal Movement

New York (Feb 27)  Palladium, in its hourly chart, exposes an advance forming an expanding ending diagonal pattern, which makes us expect the likely end of its bullish cycle. This movement could develop as a spike surpassing the upper-line of the expanding diagonal.

On the other hand, in the latest CFTC report, institutional traders informed of a reduction of 0.86% (WoW) in the long-side. This decrease is the fifth decline in a row, which, in terms of market positioning, corresponds to 65.58% of positions in the bullish side.

Palladium

The institutional positioning leads us to conclude that the bullish trend is in an exhaustion stage, making us expect a potential reversal move soon.

A sell position will activate if the price breaks and closes below $2,755.66 per ounce. If Palladium confirms our bearish outlook, the precious metal could touch, in a conservative scenario, the $2,655.92 per ounce. If the price action increases its bearish momentum, Palladium could decline until $2,542.93, and even to visit the $2,441.47 per ounce.

The level that invalidates our bearish scenario is located at $2,878.45 per ounce.

FXstreet