Platinum continued its precipitous selloff for the 7th day in a row on the back of increasing risk sentiment in the market. The upbeat market mood has been a nightmare for commodity assets, with precious metals such as gold and silver also taking hits. Platinum is currently trading at 867.19.
Technical Outlook for Platinum
Long-term, platinum’s selloff has emerged as a double top pattern, with tops around the 950 – 960 price level. The neckline at 875.97 is under great pressure, with the weekly price candle already dipping below this price level. If the candle is able to close below the neckline with a 3% price penetration factor, this confirms the pattern and opens the door for the measured move from the highest top to the neckline to terminate at multi-week lows of July and August at 841.11.
Failure to close below the neckline leads to a retest of 884.87, which is the previous low of May 21, 2018 as well as the previous high of July 15.
In the short term, platinum price action has 841.11 as the downside target, which could be attained when there is a double daily candle close below the neckline. However, failure to break the neckline opens the door for a retest of 884.87 (July 25 high and lows of Oct 16, 2019). Above this level, the high of October 11 (903.42) becomes relevant.