Based on a long-term analysis of historical data, the average positive and negative daily returns are approximately 1.03% and -1.07% , respectively. The estimated daily return in both directions based on their probability of occurrence is 0.53% and -0.50% . Friday´s return was only 0.43% , well below the first standard deviation. Our scoring is currently positive (1 ) for the month-on-month change and 2 for price indexation. Both scorings range from -3 up to 3 . Indexation is currently in the initial positive phase of the cycle. The development of the estimated cycles based on our analytical system is shown in the following chart.
Different moving averages (MAs) help us better identify trends across multiple time frames. We use 3 basic MAs to find out which sentiment dominates each horizon. The purple line represents the monthly , the green line the 6 months and the yellow line the annual moving average. In the case of monthly MA, XPT/USD is clearly in bearish sentiment. The 6 months MA could be support for the price. The annual MA still supports bullish sentiment.
In recent weeks, we have witnessed more declining trends that did not exceed 5 days. The total maximum in the measured period (last 3 years) is 7 days. Upward trends did not exceed more than 3 days in the same period. The total maximum for the last 3 years is 6 days. We could use the average long-term ATR (Average True Range) obtained from daily data (3.53% ) to estimate Stop Loss orders for our positions. The current value is 3.31% . Approximately 90% confidence interval (return between -2.40% and 2.40% ) is shown in the histogram below by a red rectangle.
We could use the last decile of low to high returns (3.60% ) to estimate Profit Targets, as shown in the chart below.
Basic technical analysis still supports long-term bullish sentiment as the commodity price creates higher highs and higher lows. The short-term outlook is more negative. XPT/USD is currently very close to the Fibonacci retracement level of 23.60% . This could be strong support for the price. However, we must see a movement above the short-term moving average and the psychological level of 1 200 . In the event of a further decline, there is the demand zone (green rectangle) with the psychological level of 1 100 . This scenario could also support the divergence between price development and the RSI, which was created from April to May.