USDZAR-trading the wave 2 near all-time highs

FX:USDZAR   U.S. Dollar / South African Rand
920 10 17
A great long term opportunity here trading the wave 2 according to previous educational post "how to look for setups using EW" (see related ideas)

Looking at weekly chart we see price finished a long term zigzag near all-time highs.

We see also a clear five wave impulse finished (wave 5 circled blue)

Here on D1 chart price already finished wave 1 (green in parenthesis) and made a deep retracement for wave 2(green).

An ideal setup for a short entry with low risk. SL above 14.000 would be enough, although technically SL should be at all-time highs.

If this count is correct price should reach the 1.61 fib expansion at least (target 2).

- SL above 14.000 (better above all-time highs)
- first target: last lows
- second target: 1.61 fib expansion
- third target : 2.61 fib expansion (near 10.000)

Other reasons to short:

- convergence-divergence setup (can you spot it?)
- AB=CD pattern visible on H4 chart (see below)
- bearish shark visible on H4 chart (see below)

Best regards.

This one might be a terrific win mate.
I'm trying to fit all pairs in a balanced portfolio.
Will be complex, but have to filter the redundant ones.
Good luck!
+1 Reply
FullTimeTrader IvanLabrie
You are right, this is the only USD related pair i will trade because the wave structure is clearer and the R/R ratio is great. Regards.
+1 Reply
moorekapital FullTimeTrader
Fundamental wise, what do you think would be the one valid reason for USD to selloff or for ZAR to perform against the green buck? Thanks for answering ;)
IvanLabrie moorekapital
I'd say dollar weakness, an emerging markets selloff/S&P500 selloff...hard to say.

@FullTimeTrader, and USDNOK or EURNOK?
Both look excellent as a short.
FullTimeTrader IvanLabrie
USDNOK looks great also but its the same trade (USD against a commodity currency). EURNOK is better, price made a pullback to the 0.61 fib and it seems a decline could start from here.Im short with small positions since the scenario with oil is no too clear.

IvanLabrie FullTimeTrader
Yes, I'm taking usdnok as a pair trade against an oil short in fact.
EURNOK is a standalone short.
moorekapital moorekapital
I doubted this thing from de very start;)
IvanLabrie moorekapital
Too steep a retrace...but let's not jump on FullTimeTrader.
+1 Reply
moorekapital IvanLabrie
Not jumping, per se. Im just comfirming my earlier opinion about this price chart of USDZAR. Technically, we were in some sort of ABC correction, and so I thought this bullishness wasn't yet done. And so, when the techs did not seem a short to me, I wanted to know, "What fundamentally was the motivation for USD to fall, i.e, ZAR to rally. No hard feelings, anyway. Just deepening my understanding. ;)
+1 Reply
moorekapital moorekapital
After the fact, yea, but this how I felt.
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