Peter Smith
⬤ Palladium (XPD) is flashing early warning signs on the daily chart. The latest session printed a bearish engulfing candle, pushing price to roughly $1,571, a daily drop of about 2.7%. Traders are watching closely as the metal grinds sideways to slightly lower, with a potential head-and-shoulders pattern taking shape on the chart.
⬤ Price is now testing the neckline of that developing head-and-shoulders structure, a level that matters: a confirmed break below it would open the door to more significant downside. Making things more complicated, XPD has spent the past week trading below the 50-day exponential moving average, a sign that short-term momentum remains tilted to the bears. Rallies continue to struggle for conviction.
⬤ That said, the bigger picture hasn't cracked yet. Palladium is still trading inside its ascending channel, meaning no major structural breakdown has occurred. The metal has been moving within a rising broadening wedge while facing selling pressure beneath the 50 EMA, a setup that reflects genuine market indecision rather than a clear directional shift. A prior surge of nearly 50%, from $1,400 to $2,100 in just two months, is a reminder of how fast sentiment can flip in this market.
⬤ XPD sits at a decision point. Bulls need to defend the channel floor; bears need a neckline break to confirm the pattern. The outcome of this standoff will likely define the next leg for palladium within the broader precious metals complex, a market that has seen some of the sharpest swings in recent years.
Peter Smith
