- Palladium rises to the third consecutive day to refresh three-week high.
- Softer USD, market’s indecision favor bulls despite firm Treasury yields.
- US ISM Services PMI, full markets eyed for fresh impulse.
Palladium (XPD/USD) prices remain firm around the highest since June 16, following bullish gold, as traders brace for Tuesday’s European session. That said, the bright metal prints a three-day uptrend near $2,825, up 0.23% intraday, by the press time.
Gold regains $1,800 and silver also stays sturdy around $26.50 as the US dollar index (DXY) extends Friday’s pullback. The DXY drops 0.17% on a day, stretching the U-turn from early April tops for the third consecutive day.
Read: Breaking: Gold price yields a break above $1800, focus shifts to US ISM
Friday’s monthly employment numbers from the US raised questions over the Fed’s next moves as the headline Nonfarm Payrolls (NFP) jumped 10-month high and the Unemployment Rate also rose. It's worth noting that recently easing inflation expectations, according to the 10-year breakeven inflation rate of the St. Louis Federal Reserve (FRED), also probe Fed hawks and underpin the USD pullback.
Elsewhere, mixed concerns over the coronavirus (COVID-19) and the US Treasury yields rebound keep palladium buyers in check. Also probing the commodity’s upside is the cautious sentiment ahead of the key US ISM Services PMI for June, expected 63.5 versus 64.0 expected.
Furthermore, the Federal Open Market Committee (FOMC) minutes and a surprise ECB meeting also keep traders on their toes even as the US Senate is up for a return after a two-week-long holiday period.
Considering the covid resurgence, global central banks are likely to keep monetary policies easy, which in turn favor palladium buyers. However, it will prudent to follow the US dollar moves for the clearer direction, mainly due to the greenback’s safe-haven appeal.
Read: ISM Services PMI Preview: Why the inflation component could trigger a dollar rebound
Technical analysis
In addition to a sustained run-up beyond a two-month-old resistance line, now support, a clear upside break of 50-DMA, near $2,805, also backs the palladium buyers.