Today we are going to take a look at what kind of picture daily EURZAR chart is painting.
It is obvious that EURZAR is in strong downtrend which started in November 2008, after reaching peak around 15.30. From around November 2009 EURZAR is in clearly defined downtrend.
On Tuesday and during early morning yesterday EURZAR tested long term support at around 9.30, coupled with bottom of the channel. Support held and market bounced some 30 points or 3% and it is resting around previous support which is now resistance (around 9.62) and for now that is where top line of the channel is.
To me 9.30 looks like very solid and strong support that will not be broken easily. Problem here could be that big guys are not anymore keen on risk side so much. That could cause EURZAR to go up from here, because money can flow out of the country.
On the upside, if channel is broken EURZAR will test 9.95-10.10 in no time. Those levels can play resistance and stop market to go further up. Just be aware that there is empty space between 10.00 and 10.70 with not much resistance on the chart. If market breaks above 10.00, especially with global markets continuing in southbound direction, we could see 10.70 tested once again.
Trade with trend!
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