Trend: Side­ways. EURO/RAND – A BREAK­OUT

Finweek English Edition - - COMPANIES&MARKETS -

Strat­egy: Wait for the new break­out direc­tion. The euro/rand is in a large broad­en­ing for­ma­tion (lines 1 and 2). It’s cur­rently con­sol­i­dat­ing just be­low line 2, which is typ­i­cally a bullish sign. It’s also moved above its 200-day mov­ing av­er­age (MA) and is hold­ing there (bullish). But the price is cur­rently form­ing a “po­ten­tial” dou­ble top (over the past two months). A close be­low line 3 – and specif­i­cally be­low its 200-day MA – will be bullish for the rand. En­ter in the direc­tion of the new break­out: ie, if it closes above line 2 (9,94) go long the euro/rand (ie, short the rand). But a close be­low its 200-day MA (9,4575) will be a short sig­nal on the euro/rand (long sig­nal on the rand). Do which­ever hap­pens first. The tar­get for an up­side break above line 2 will set up a move to 11,30: ie, the height of pat­tern 1-2 pro­jected up. But a close be­low its 200-day MA will set up a move to 9,10. For a break­out above line 2 the stop will be a close be­low 9,65. For a short sig­nal on the euro the stop is a close above 9,70.

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