Palm oil may fall towards 3,738 ringgit

SINGAPORE: Palm oil may break a support at 3,888 ringgit per tonne and fall towards the next support at 3,738 ringgit.

The consolidation triggered by this support seems to have ended at the May 28 high of 4,061 ringgit.

The downtrend from 4,525 ringgit may have resumed.

Most of the trend has been developing within a falling channel, which indicates a further drop towards 3,738 ringgit.

A break above 4,010 ringgit could lead to a gain at 4,132 ringgit.

On the daily chart, the support at 3,856 ringgit looks vulnerable. What was expected to be a solid bottom around this level may turn out to be a mild consolidation in the process of a strong fall.

Despite being strengthened by a similar support established by a rising channel, the support at 3,856 ringgit seems unable to hold under repeated attacks by bears.

A break could open the way towards 3,698-3,774 ringgit range.

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