US$/RAND – NEARING SUPPORT
Trend: Short-and medium-term rand strength. Long term sideways.
Strategy: Go long the rand on pullbacks, then sell short from line 1. The US dollar/rand is still in a large channel (lines 1 and 2). It recently broke down from a symmetrical triangle (lines 3 and 4). More rand strength (towards line 1) is expected. However, the short-term stochastic oscillator (on top) is oversold for the US dollar. That points to the rand weakening again after it reaches line 1 (7,2250). For now, short-term traders to go long (buy) the rand on minor bounces towards line 5 (7,41 level). Take profits at/near line 1 (7,2250, on a closing price basis). Then sell short the dollar/rand only if it gives a clear reversal up from line 1. Note: There’s a target from the triangle of 7,1820 – ie, the height of the triangle projected down. However, because line 1 (7,2250) is very solid support it’s unlikely any breakdown below line 1 will last long. To the upside (after a retest of line 1) it will be back towards line 2 at 7,86. There will be some prior resistance at line 4 (7,62 level). The stop will be a close below 7,18.