Published: January 28th, 2021
The price of Platinum has been steadily declining since the beginning of 2011. During the past 10 years, it has dropped by over 70%, while moving from the $1915 high, down to the $565 low, established in March 2020. From March 2020 XPT/USD has been printing higher highs and higher lows while breaking the key resistance formed near $1000. This is an extremely important psychological resistance and prior to the breakout, Platinum bounced off the $825 support, after which it broke above the 200 Simple Moving Average.
The downtrend trendline, $1000 resistance, and 200 SMA were broken, confirming a strong bullish pressure. After the price penetrated the 1k resistance, it corrected down and rejected it. Currently, $1000 has become key support and as long as the price remains above, bulls will have complete control over the Platinum.
In regards to the upside potential, the price can be expected to rise towards the $1300 resistance area, which previously acted as the supply/demand zone. Besides, this level is confirmed by 261.8% Fibonacci level, applied to the corrective move down where $825 support was rejected.
On this chart, an Elliot Wave theory is applied. It can be seen that when XPT/USD rejected the $1000 resistance, an ABC correction followed. Right now, Platinum could be undergoing wave 3, which might result in a price increase of another $225. It can be seen, that the $1300 resistance area, is now confirmed by two Fibs, 261.8% as per the weekly chart, and 227.2% Fibs applied to the recent correction down, where the uptrend trendline was rejected.
Back to the Elliot Wave theory, the $1300 area might not be the final upside target for buyers, but only a resistance area, where the price is likely to have a correction down. After the correction, Platinum might move much higher, potentially towards the $1400-1500 area, completing the final 5th wave.
On this chart yet another ABC correction was formed, after which XPT continued to move higher. Today, the price has reached and rejected the average-price support trendline, which can be considered a positive sign for XPT. Perhaps this is a decision making price area, which might show the near-term price perspective for the Platinum. If there will be a break to the downside, the likely scenario is that price will once again test the $1000 mark, before/if the uptrend will continue. This price area also corresponds to the 200 EMA, making it a perfect entry point for swing traders.
On the 4-hour chart, the price is moving within the ascending channel while remaining above the 200 EMA. Clearly, the trend is bullish and today’s price broke above the downtrend trendline. Nonetheless, XPT rejected the 50 EMA, which has formed a local resistance at the $1100 level. Unless current resistance will get broken, the downside risk will remain high, but when/if it gets broken, XPT/USD uptrend can be expected to continue. Right now price not only is at the bottom of the channel but also right at the previous resistance area near $1057, which is now acting as the support.
On the hourly chart, we can observe an ongoing consolidation phase. Price has been locked between the $1050 support and $1130 resistance area. There was an attempt to break below the support and then above the resistance. But none of these attempts resulted in any directional move. The price indecision on lower timeframes becomes obvious and XPT/USD could be still struggling to find the trend. Considering that 200 EMA, as well as the downtrend trendline, got rejected, Platinum still can move lower, to re-test the support near $1050. The current resistance can be clearly seen between $1091 and $1099, which is confirmed by two Fibonacci retracement levels, both of which are 38.2%. It makes $1100 and a key price area to watch because only the break above can be the final confirmation of the uptrend continuation.
The Platinum has clearly established a long term uptrend after price broke above the key psychological resistance at $1000. Recently that resistance became the support and got rejected. Nonetheless, on the lower timeframes, the consolidation is ongoing and it is highly important that XPT/USD will break above $1100 to confirm the uptrend continuation.
As per the weekly and 2-day chart, the nearest strong resistance and the potential upside target is located near the $1300 psychological level. It is confirmed by two Fibonacci retracement levels and corresponds to the previous supply/demand area.
With the given price action, the probability of a downtrend is very low. However, as power the 16-hour chart, break below the $979 support level will invalidate the bullish forecast and in this case, the price might decline towards the $828 support.
Support: 1040, 1007, 979
Resistance: 1091, 1099, 1134, 1155, 1297