Palladium futures (June delivery) reactivated their long-term uptrend after a one-year break, pinning a new record high marginally below the 2,900 psychological mark on Wednesday.
The current weakness in the price is justified by the flashing overbought signals in the RSI and the Stochastics, which look to be shifting southwards again. Yet, the downside move is not discouraging for now and the positive momentum could easily recover if the 23.6% Fibonacci of the 2,185 – 2,889 up leg coupled with the 20-day simple moving average comes to the rescue around 2,723. If this floor collapses, the negative correction could steepen towards the key 2,530 barrier unless the 38.2% Fibonacci of 2,620 blocks the way down.
Alternatively, a boost higher could be more inspiring as buyers eagerly wait for a surge above the 3,000 threshold and a new top around 3,150.
In brief, palladium futures are expected to give up some ground as overbought signals strengthen, though buying interest may not fade as long as the price keeps fluctuating above 2,723.
