Palm oil (FCPOc3) may test support at 4,485 ringgit per metric ton; a break below this level could open the way toward 4,440 ringgit.
A small wave c from 4,632 ringgit has travelled below a key support at 4,513 ringgit, its 61.8% projection level. It is highly likely to extend to the 100% level of 4,440 ringgit.
A stabilization of the market around 4,485 ringgit would cast doubt on this target, as such stabilization may precede a strong bounce or a trend reversal.
On the daily chart, the contract broke a support at 4,524 ringgit, but managed to hover above the lower trendline of a wedge.
The market's performance on Friday will be key to understanding the subsequent move. If it closes above 4,524 ringgit, it may resume its rise toward 4,675 ringgit.
However, signals on the hourly chart suggest a downside bias. Most likely, the contract would be priced around 4,403 ringgit.
** Wang Tao is a Reuters market analyst for commodities and energy technicals. The views expressed are his own. His analyses are exclusively published on the Workspace platform - London Stock Exchange product.
** No information in this analysis should be considered as being business, financial, or legal advice. Each reader should consult their own professional or other advisers for business, financial, or legal advice regarding the products mentioned in the analyses.