DanVmod 18 months ago
I don't trade these exotic, though might consider small position on major sell signal when it mature. However, in the intermediate term, I am bullish. The current formation looks like a rising wedge called Leading Diagonal, which if correct should find prices head back the the upper end of the pattern around 9.20 area. Dollar could make partial retracement to the upside against most pairs as could be seen from Dollar Index chart. So this pair could bounce with it, hence could be quite profitable. However, my real interest would lie in Major short around 9.20. At this level, it would complete this potential rising wedge and could offer opportunity for sell with target back towards 6.60 or lower in line with my view that longer term Dollar Index will be making new historical low in the next 12 months or so. Check out my Dollar Index Chart for explanation.
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In our last chart we achieved our upside target, though I did not trade long as I indicated I have never traded this pair. However, due to the chart formation with what I think is rising wedge formation, ie Ending Diagonal that lines up with declining long term trendline, at fib ration confluence and with my view on Dollar index published little while ago - chart link https://www.tradingview.com/v/c08dC1LT/ I feel that this short set up looks excellent for long term swing or position trade. This was an ABC correction to the upside hence longer term down trend will re-exert. There for whilst the ride is not going to be without some retracement along the way, I anticipate that the last major low at 6.5 level will be retested or a new lower formed. The only question remains is that how do you enter? I have already entered on minor pull back on intraday @ 9.05 with limit order and stop just above the high. However more conservative entry would be wait for reasonable retracement in the form of minor abc with usual Fib percentage which should confirm that the trend in deed is to the downside. Friend who initially asked me to do original chart also pointed out that in addition to the capital gain we could expect interest carry trade benefit too. So I am looking forward to experiencing profitable trade. Hope you will consider it at least from Technical charting perspective which is not really taking in to account any fundamental issues of either of the countries.
Thu Jan 31 11:18:25 2013 UTC
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mantasg Dec. 21, 2012, 5:11 a.m.
Cheers mate :)
DanVmod Dec. 21, 2012, 5:27 a.m.
You are welcomed. As I said, I will join you on this one when it reaches shorting zone. In the meantime, if you do decide to go long, I wish you well and will share in your excitement:)
TUNAHANFX agreed with this chart, Dec. 21, 2012, 5:52 a.m.
DanVmod Dec. 21, 2012, 6:24 a.m.
Hi, thanks for taking the time to view my chart and agree with the analysis:)
DanVmod Jan. 27, 2013, 4:45 p.m.
UPDATE - Since publishing the chart Price has now approach out shorting zone. I would look for ideally a small fall and then another minor dive up to create a marginal higher high and corresponding RSI divergence for a good sell with limited. risk in clearly defined stop loss. OR expect a drop and then partial retracement with weak price action creating a lower low to enter short position with stop above the current high. If we continue higher then we have to wait for another opportunity. Here is the Updated chart

DanVmod Jan. 30, 2013, 5:51 p.m.

USDZAR, has reached the upside target and is now ready for potential short. As you will note you have Inside Red Candle, Bearish Harami. Hence on the breakdown of the last Blue Candle could be potential short Entry with stop above the high and longer term target is retest of the low. Dollar Index looks very vulnerable to the downside hence whilst ZAR is not represented in Dollar Index could add to our expectation of Dollar weakness. Use your sensible Money Management Rule as always.
DanVmod Jan. 31, 2013, 4:56 a.m.
From my last update you will note that the upside target was hit and profit taken. In fact the real trade is now to the downside long tem swing trade with possible target to retest the low over time
Razvan agreed with this chart, Jan. 31, 2013, 4:57 a.m.
Nice, well done :)
DanVmod Jan. 31, 2013, 5 a.m.
Thank you. I am republishing this chart now with short trade setup. Will post it shortly.