Thursday, April 8, 2010
Where South African Rand is heading
I would like to take a look today where South African Rand is heading to. There are two charts on top. First one is daily EURZAR chart for last 3 years, while the second one is USDZAR daily chart for, more or less, same period.
As we can see from EURZAR chart, pair is in strong and solid downtrend, meaning that ZAR is getting stronger versus EURO. Currently, pair is very close to the bottom of the channel, so bounce toward upper line is possible. That can take us to around 9.95, which was previous support and should act as resistance now. Longer time frame can take us down to 9.33, what was major low in 2007. Finally, that can stop EURZAR decent and offer solid support for some time.
USDZAR is locked in trading range between 7.22 and 7.85 since around August 2009. Over last few days pair spent time on the lower side of the range with one unsuccessful break down. After false break, pair bounced some 10 points and is trading around 7.30 right now. Break of the range will probably take us down to support around 6.41 level, which was in play in October 2007. That is just a bit lower then channel projection of around 6.60.
Those charts are as info only, because our trading systems are making decisions for us.
Trade with trend!