The FX Trader’s view –
In Tuesday’s FX Trading Guide we noted several bullish clues in the USD/ZAR chart. We had switched from a Bearish to Sidelined stance and now, following the gains seen this week, we are able to Go Bullish.
- WEEKLY CHART:
On this chart we have been keeping an eye on the 76.4% retracement of the 2007/2008 upmove.
So far it is providing support. -
DAILY CHART:
As well as the 76.4% level (Weekly chart) we had marked in a Fibo projection at 7.6000 several weeks ago.
Note the positive RSI divergence and, equally important, the chart structure of the last two months which has the classic look of a mature stage.
The recent close above the s/term falling resistance line has given an initial bull sign/ trigger.
The initial upside target is the 8.7788 15-May high – we will look at retracement levels in next week’s Guide – there are enough lines on this chart for now. - Buyers on dips into the 7.9500/7.9000 area will likely favour initial stops just below the 7.6200 01-Jul low, seeking partial profits around 8.3400/8.3500 then raising stops to cost.
- Our Recent EUR/GBP Update: Last Thursday’s Update favoured a s/term recovery in this cross, and we still look for this. Later that day the suggested 0.8535/15 buy area was reached. Longs continue to target 0.8800 for partial profits, but we already favour stops rising to 0.8499 to minimize loss now. Note how well s/term resistance from the 0.8636/55 area has worked so far this week.
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