SINGAPORE (June 19): Palm oil may retrace into a range of RM1,983-2,004 per tonne as it failed to break a resistance at RM2,068.
The resistance is provided by the 38.2% retracement of the downtrend from RM2,235 to RM1,964. Working together with this resistance is another one established by a falling trendline.
The contract has pierced below a support at RM2,028. It is likely to retrace further to RM2,004 or RM1,983.
A break above RM2,068 could open the way towards RM2,100-2,131 range. On the daily chart, the contact failed to break a resistance RM2,046, the 61.8% projection level of a downward wave C from RM2,235. The failure could have caused a drop towards RM2,001, which falls within the target range of RM1,983-2,004.
(Wang Tao is a Reuters market analyst for commodities and energy technicals. The views expressed are his own. No information in this analysis should be considered as being business, financial or legal advice. Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses.)