SINGAPORE: Palm oil may fall to 4,009 ringgit per tonne, as it failed a few times to break a resistance at 4,164 ringgit. The failures suggest an exhaustion of the rally. A temporary top could be forming around 4,164 ringgit. The former target of 4,260 ringgit has been aborted. It will be resumed when the contract breaks 4,164 ringgit.
The bearish divergence on the hourly MACD (moving average convergence divergence) confirms the exhaustion as well. A decent correction is due. On the daily chart, the contract failed to break a resistance at 4,147 ringgit.
The failure may have triggered a correction towards 3,915 ringgit. The fall will look symmetrical to the rise from the June 1 low of 3,852 ringgit. The uptrend may resume, if the contract manages to stabilize around 3,915 ringgit. A further fall could signal the continuation of the downtrend from 4,525 ringgit.
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