Car sales are declining worldwide
Palladium quotations again approached the historical maximum. Meanwhile, the car sales worldwide is decreasing. Is XPDUSD correction possible?
Approximately 80% of global palladium consumption is accounted for by the automotive industry and the production of catalysts to reduce harmful gasoline engine emissions. Another 5% is consumed by the global chemical industry. As environmental standards tightened, the demand for autocatalysts increased and the price of palladium soared 3 times in the last 3 years. Now it has reached the psychological level of $ 1600 / ounce for the 2nd time. Meanwhile, according to the estimates of the Association of European Businesses, the Association of European Automobile Manufacturers and a number of consulting agencies, sales of automobiles in the world decreased by 7.4% in 1Q2019 compared to the same period of 2018. The data for the first half of the year may turn out to be even worse, since according to official data, the decline in car sales in China in January-May 2019 was 15.2%. Note that after 3-fold growth of palladium quotations, its consumption has decreased in the jewelry and electronics industry, in dental prosthetic and in the issue of investment coins and bars. Theoretically, it is possible to increase the dependence of quotations on the state of affairs in the global automotive industry and the chemical industry.
On the daily timeframe XPDUSD: D1 adjusted down from the historical maximum. It overcame the growing trend support line. Decrease in quotations is possible in the event of a decrease in global demand and a continuation of the decline in the Chinese automotive industry.
Technical Analysis Summary
Position Sell
Sell stop Below 1520
Stop loss Above 1620
Palladium quotations again approached the historical maximum. Meanwhile, the car sales worldwide is decreasing. Is XPDUSD correction possible?
Approximately 80% of global palladium consumption is accounted for by the automotive industry and the production of catalysts to reduce harmful gasoline engine emissions. Another 5% is consumed by the global chemical industry. As environmental standards tightened, the demand for autocatalysts increased and the price of palladium soared 3 times in the last 3 years. Now it has reached the psychological level of $ 1600 / ounce for the 2nd time. Meanwhile, according to the estimates of the Association of European Businesses, the Association of European Automobile Manufacturers and a number of consulting agencies, sales of automobiles in the world decreased by 7.4% in 1Q2019 compared to the same period of 2018. The data for the first half of the year may turn out to be even worse, since according to official data, the decline in car sales in China in January-May 2019 was 15.2%. Note that after 3-fold growth of palladium quotations, its consumption has decreased in the jewelry and electronics industry, in dental prosthetic and in the issue of investment coins and bars. Theoretically, it is possible to increase the dependence of quotations on the state of affairs in the global automotive industry and the chemical industry.
On the daily timeframe XPDUSD: D1 adjusted down from the historical maximum. It overcame the growing trend support line. Decrease in quotations is possible in the event of a decrease in global demand and a continuation of the decline in the Chinese automotive industry.
- The Parabolic indicator indicates signal to decrease.
- The Bolinger bands widened, indicating high volatility. The top line slopes down.
- The RSI indicator is above the 50 mark. It has formed a divergence to decrease.
- The MACD indicator gives bearish signal.
Technical Analysis Summary
Position Sell
Sell stop Below 1520
Stop loss Above 1620