SINGAPORE: Palm oil faces a strong resistance at 3,916 ringgit per tonne, it may hover below this level or retrace towards 3,686 ringgit.
The bounce from 3,481 ringgit proved to be of same degree to the one from the August 19 low of 4,000 ringgit.
A falling channel imposes a limit of 3,916 ringgit to the current bounce.
A wave d may have been driving the bounce.
This wave is expected to be reversed by a downward wave e. Strategically, the target of 3,686 ringgit will be confirmed when the contract breaks 3,813 ringgit.
Palm oil rises over 2% as early Sept exports strengthen
A break above 3,916 ringgit could lead to a gain to 4,018 ringgit.
On the daily chart, the contract is facing a similar resistance at 3,891 ringgit, which increases the chance of a correction towards 3,647 ringgit.
The sharp surge on Tuesday is interpreted as the final release of the bullish momentum, instead of a prelude to a much sustained rise.
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