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XPD/USD statistical and technical analysis

The current price of XPD/USD - Palladium Spot US Dollar is 2 825.5 (May 28, 2021). This commodity has risen above all-time highs in the last month. We also wrote about a possible resistance of 3 000 that holds and the price has corrected down. Let’s now look at statistical and technical analyzes.

Based on a long-term analysis of historical data, the average positive and negative daily returns are approximately 1.47% and -1.53% , respectively. The estimated daily return in both directions based on their probability of occurrence is 0.75% and -0.70% . Friday´s return was 0.73% , well below the first standard deviation. Our scoring is currently neutral (-2 ) for the month-on-month change and 0 for price indexation. Therefore, it is currently in the negative phase of the cycle. Indexation is currently in the last declining phase of the cycle. Both scorings range from -3 up to 3 . The estimated cycles development based on our analytical system is shown in the following chart.

XPD/USD daily price indexation and cycles Source: WALFIR

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. The price of XPD/USD has weakened over the last month. Therefore, in the case of the monthly MA, it is in bearish sentiment after it has fallen below it in recent days. As we can see in the chart below, the 6 months and annual MAs still support bullish sentiment.

XPD/USD daily price development Source: WALFIR

Over the last month, we have witnessed more declining trends, with the maximum level reaching 3 consecutive days. However, the total maximum in the measured period (last 3 years) is 5 days. The upward trends did not exceed more than 3 days in the same period. The maximum in the measured period is 14 days. We could use the average long-term ATR (Average True Range) obtained from daily data (3.42% ) to estimate Stop Loss orders for our positions. The current value is 2.69% , which is below this average. Approximately 90% confidence interval (return between -3.0% and 3.0% ) is shown in the histogram below by a red rectangle.

XPD/USD daily return distribution Source: WALFIR

We could use the last decile of low to high returns (5.25% ) to estimate Profit Targets, as shown in the chart below.

XPD/USD daily low to high distribution Source: WALFIR

The basic technical analysis points to positive sentiment since the beginning of this year, as the price creates higher highs and higher lows. XPD/USD is currently very close to the short-term moving average, which supported its price after falling in the last month. In addition, the divergence between the price development and the RSI could support this scenario. However, in the event of a further decline, there is the demand zone (green rectangle), where are also the Fibonacci retracement level of 23.60% and the psychological level of 2 700 in the top of the zone.

XPD/USD basic technical analysis Source: TradingView

WALFIR Technologies is one of the three divisions of WALFIR s.r.o., which is based in Slovakia. The primary interests of this division are analytical, quantitative, and algorithmic...

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