The rand managed to stage an impressive recovery last week off the back of the increased risk on investor sentiment which allowed the rand to pull the pair below the 50-day and 200-day MA support rates.
I did not expect the rand to pull the pair onto the upward blue trend line but the month-end flows helped nudge the rand a further than expected. This pair has humbled me in the past few weeks.
I still however believe that this is a temporary pullback for the pair. A failed break below the upward blue trend line and the support at 18.68 will see the pair re-test the critical rate of 18.97. The pair is currently being squeezed by this blue wedge and I still favor a top side break over a downside break.
A break above the critical rate of 18.97 will be an early indication of a top side break of the wedge. A break below 18.68 will however invalidate the expected price action in the chart.
I did not expect the rand to pull the pair onto the upward blue trend line but the month-end flows helped nudge the rand a further than expected. This pair has humbled me in the past few weeks.
I still however believe that this is a temporary pullback for the pair. A failed break below the upward blue trend line and the support at 18.68 will see the pair re-test the critical rate of 18.97. The pair is currently being squeezed by this blue wedge and I still favor a top side break over a downside break.
A break above the critical rate of 18.97 will be an early indication of a top side break of the wedge. A break below 18.68 will however invalidate the expected price action in the chart.
Comment:
Expecting a re-test of the 18.68 handle after today's NFPs. The idea will have to be invalidated if the pair can't maintain rates above 18.68
The idea will be invalidated if the pair fails to climb back above 18.68