Commerzbank is predicting new all-time highs for Palladium (XPD/USD) at 2878.04. However, this is conditional upon the break of the 20-day moving average at 2645, as spelled out by the Head FICC Technical Analysis Research at the bank, Karen Jones.
According to Jones, the current advance in palladium prices is expected to clear the 2758.00 high (achieved on 18 March) before marching towards a new all-time high at 2878.04.
Commerzbank thinks that an unexpected drop below the 2491.10 February high is the factor that would allow for a re-evaluation of this outlook and that this could lead to consolidation between the March low at 2278.99 (floor) and the September-to-January lows at 2202.99/2184.67 (ceiling).
Palladium prices have been in an upswing as hopes of economic recovery boosted the prices of industrial metals in the first quarter of 2021.
Technical Outlook for Palladium
Palladium’s daily chart reveals that the metal price is forming a rising wedge on the daily chart. This could be indicative of a short-term correction before a resumption of the uptrend. In any case, the price needs to break above the pattern, and clear the 18 March high (as per Commerzbank’s outlook) to post new highs.
Otherwise, the rising wedge could be the trigger for a corrective move towards the ceiling of the consolidation area at the 2500 psychological support level, with a potential to drop towards 2424.44 if the bulls do not initiate a dip-buy at 2500. The corrective move would also need to take out the 2596.36 support in the course of its evolution.