SINGAPORE: Palm oil may extend gains to 3,563 ringgit per tonne before reversing its rise and falling towards the May 25 low of 3,388 ringgit. A retracement analysis on the rise from 3,288 ringgit to 3,837 ringgit reveals a break above the 61.8% retracement.
The break opened the way towards 3,563 ringgit.
A gap forming on May 15 is expected to work together with the resistance at 3,563 ringgit to stop the rise and force the contract to drop.
A break above 3,563 ringgit may lead to a gain to 3,627 ringgit.
A drop below 3,470 ringgit could signal a completion of the bounce.
On the daily chart, another retracement analysis on the fall from 4,425 ringgit suggests a target of 3,556 ringgit.
Palm oil ends near two-week high on weak ringgit
The current difficulty is how to classify the potential gain to 3,556 ringgit, which could be either a bounce against the fall from the May 9 high of 3,837 ringgit or an extension of the rise from 3,288 ringgit.
A break above 3,556 ringgit may be followed by a rise towards 3,722 ringgit.
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