Short-term players to still buy the rand on a pullback. In December, the British pound/rand tested a multi-year rand resistance level (line 1). It then broke through it. Will that be a false breakdown or not, as seen in early 2006 (see circled region)? More recently, the currency has been in a small channel (lines 3 and 4), with rand resistance at 9,85 (line 3). The weekly stochastic oscillator isn’t yet oversold and therefore pointing to more rand strength to come before a reversal. Traders to go long (buy) the rand against the pound but with greater caution, given the extended trend of rand strength over recent months. A bounce to 10,81 (line 1) is to be bought, for a drop to 10-9,85. Place your stop-loss as a close above line 4 (10,93). After that rand rally, look for rand weakening again to more than 12.