This blog has been created to help people interested in ways of trading futures and making money in South Africa
Friday, March 19, 2010
EURZAR and USDZAR daily charts
Today we are going to check two charts: USDZAR and EURZAR, both daily time frame.
Yesterday EURZAR has broken bellow psychological level of 10.00 and is currently trading around 9.95, on very long support that goes back all the way to 2007. In addition, EURZAR is locked in clearly defined channel that started in November 2009 and is still intact. Top of that channel is currently around 10.19.
If EURZAR manages to break below 9.95 next supports is in the region of 9.33 where triple bottom was formed in April, July and October 2007, which eventually caused EURZAR to go all the way up to 15.26.
Second chart is daily USDZAR chart and we can see similar picture there. From early August 2009 USDZAR is locked in trading range from 7.22 to 7.85. Currently is trading around bottom of that specific range. If it manages to break down we can see 6.60 where target for break of the range is or even 6.40 where support made in November 2007 is.
So, why ZAR is getting stronger?
I’m not forex or global picture expert, so I would use comment made by Jimmm Slater, one of the regular posters on page88.co.za forum, who works for “MEGABANK” (as he likes to say) and whom I trust big time when it comes to global pictures and macro views.
He said: “FX flows on macro not the micro. The ZAR is just part of the risk on risk off trade and risk on looks like its back driving the market at the moment. ZAR is a deep, liquid market that big funds can play around in. We (they) don’t care about what is actually happening in the country, we just use the ZAR as a way of playing the global macro trend. Facts, even economic facts, have very little to do with the performance of risk assets.”
What will happen to ZAR in near future? Me view is that it will continue to get stronger, at least until appetite for risk is there. Maybe this ZAR strength will influence Top40 shares, so THEY (from Jimmm’s comment above) are going to increase purchase of shares and bonds here in SA and that will push our markets up.