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  • Palladium extends the previous day’s recovery from monthly low, on the bids recently.
  • Upbeat market sentiment, US dollar losses put a bid under precious metals.
  • Fed policymakers succeed in taming reflation fears, downbeat US data, trade/political headlines also favor risk-on mood.

Palladium (XPD/USD) stays on the front foot, up 1.12% to attack intraday high above $2,800, heading into Wednesday’s European session. In doing so, the commodity follows its other counterparts amid risk-on mood, also cheer the US dollar weakness, by the press time.

The US dollar index (DXY) drops for the third consecutive day, down 0.08% around January lows white writing, as market sentiment improves following the US Federal Reserve (Fed) official’s efforts to placate reflation and tapering woes. Other than the brighter market mood, the recently downbeat US data line exerts additional downside pressure on the greenback gauge.

Furthermore, the US removal of China’s Xiaomi from the blacklist and readiness to ease restrictions on the Russian oil pipeline joins Japanese policymakers’ optimism and push for more stimulus to amplify the rush towards the riskier assets.

Amid these plays, stock futures and the US Treasury yields print mild gains whereas commodities, especially bullion, pick up bids.

Looking forward, XPD/USD traders will follow commodities’ tunes, which in turn highlights the importance of Fedspeak and the US data for near-term direction.

Technical analysis

Recovery moves from a two-month low around $2,727-26 propel palladium towards $2,830 immediate hurdle. Though, any further upside will be probed by the monthly resistance line and 21-day SMA, respectively near $2,860 and $2,896.