USD/ZAR has been up trending for the last two years with the precision of a Swiss watch. The current bullish channel is still in play and the pair is about to test the lower bound of it after two failed attempt to break above the 11.3388 resistance line. Here are the reasons why rebound is soon due:
Fundamental background:
The Dollar is still supported by the Fed monetary policy in place (QE unwinding and probable rate hike in 2015).
Technical picture:
As said on the intro, the pair is about to retest the lower bound of a two years up trending channel, in addition to that, the stochastic oscillator is about to enter oversold territory which suggest that the downside potential is now limited and a reversal becomes more and more probable. We have two key supports to watch closely which are 10.8950 and lower at 10.80 (low level of October). Last but not least the 200DMA comes as a strong support.
Trade setup
Agressive entry @10.8950 and more conservative at 10.8000
SL@10.60
Two take profits targets will be placed at 11.3388 and the second one at 11.60.
Fundamental background:
The Dollar is still supported by the Fed monetary policy in place (QE unwinding and probable rate hike in 2015).
Technical picture:
As said on the intro, the pair is about to retest the lower bound of a two years up trending channel, in addition to that, the stochastic oscillator is about to enter oversold territory which suggest that the downside potential is now limited and a reversal becomes more and more probable. We have two key supports to watch closely which are 10.8950 and lower at 10.80 (low level of October). Last but not least the 200DMA comes as a strong support.
Trade setup
Agressive entry @10.8950 and more conservative at 10.8000
SL@10.60
Two take profits targets will be placed at 11.3388 and the second one at 11.60.