SINGAPORE: Palm oil may break a support at 3,706 ringgit and fall towards the July 14 low of 3,489 ringgit.

The contract failed twice to break a resistance at 4,057 ringgit.

The failures suggest either a completion of the bounce from 3,489 ringgit or a prevailing bearish sentiment.

Even if the uptrend from 3,489 ringgit has only completed its first part and may extend at a later stage, the contract is likely to approach 3,489 ringgit again for forming a solid bottom before rising.

Palm oil closes nearly 3pc lower on bearish price outlook

Resistance is at 3,840 ringgit, a break above which may lead to a gain to 4,057 ringgit. On the daily chart, the attempt to escape from a narrow channel failed.

The downtrend from 6,698 ringgit may have resumed. It is expected to develop further in the channel.

Only a break above 4,070 ringgit could confirm the completion of a five-wave cycle from 6,698 ringgit.