Trend: Sideways. EURO/RAND – A BREAKOUT
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.