Palm oil may test support at 3,602 ringgit

SINGAPORE: Palm oil may test a support at 3,602 ringgit to 3,635 ringgit per tonne, a break could open the way towards the range of 3,447-3,506 ringgit.

The contract is riding on a wave C from 4,260 ringgit which may end around 3,602 ringgit or extend to 3,195-3,351 ringgit range. Given that the uptrend from the March 31 low of 3,495 ringgit has been almost reversed, this low could be revisited.

Once the contract drops to 3,495 ringgit, it is highly likely to extend its loss towards 3,351 ringgit. Resistance is at 3,691 ringgit, a break above which could lead to a gain into 3,757-3,853 ringgit range.

On the daily chart, the current fall could be against the uptrend from 1,939 ringgit.

A retracement analysis suggests an immediate target of 3,537 ringgit, while a rising channel indicates a drop to 3,232 ringgit.

Palm oil may pause around the support at 3,537 ringgit and bounce thereafter, as this support falls within a congestion area forming between March 31 and April 16.

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