Trend: Short-and medium-term rand strength. Long term side­ways.

Finweek English Edition - - COMPANIES & MARKETS -

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.

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