Palladium pulls back from an eight-day high and re-establishes an intraday low.
In the midst of covid troubles and restrained Fedspeak, steady US Treasury yields add to the USD’s resilience.
Bears will be entertained by the light schedule, pre-NFP attitude, and quarter-end consolidation.
Palladium (XPD/USD) is trading at $2,670 per ounce, down 0.65% intraday heading into Tuesday’s European session. The yellow metal rose to its highest level since June 17 the day before, amid a light calendar and mixed reports, the bulls were recalled by the strength of the US dollar.
Concerns over the comeback of the coronavirus (COVID-19) and Fed policymakers’ inaction put a floor beneath the US currency. The recent slowdown in US Treasury yields, as well as the pre-NFP caution, may also be supporting the greenback.
While Wellington is considering dropping the covid alert after a protracted absence of new virus cases, pandemic conditions in Australia appear to be worsening. In addition, on Monday, the United Kingdom recorded the greatest number of illnesses since January 30.
It’s worth noting that the US PCE Inflation report has thrown cold water on Fedspeak’s attempts to defend cheap money policy. Policymakers, on the other hand, are wary. “The Fed has made substantial more progress against the inflation goal,” Thomas Barkin, President of the Richmond Federal Reserve Bank, stated on Monday.
US President Joe Biden’s preparedness for more stimulus versus Senate Republican Leaders’ efforts to moderate the tax raise actions may also be perplexing the markets, providing strength to the US dollar and hurting commodities.
The US 10-year Treasury yield takes a pause after plummeting the most in a week, while S&P 500 Futures show minor losses near the record high.
Looking forward, the US CB Consumer Confidence and China PMIs may provide palladium traders with intermediate swings, probably to the downside, ahead of the US Nonfarm Payrolls (NFP) for June.
In time for June payrolls, there are signs that certain labor bottlenecks are loosening.
XPD/USD buyers may remain optimistic unless the $2,500 support confluence, which includes the 200-day moving average and an ascending support line dating back to March 2020, is broken.
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