Gold pulls back from over two-month high amid rising oil, caution ahead of CPI
In our last note on the USD/ZAR currency pair we noted false break and bullish price reversal (circled blue) around the R12.85/$ level. We were looking for a break of the R13.15/$ level to unlock a relatively quick move to the top of the medium term range at R13.50.
Since the last report the technical assumptions have manifested quite well as the USD/ZAR currency pair broke the R13.15/$ mark (blue arrow) before moving to and exceeding the R13.50/$ upside target.
The move higher takes the currency out of the medium term range previously highlighted as well as the broader triangle consolidation highlighted on the chart.
The USD/ZAR now also trades firmly above the 20 (red line), 50 (green line) and 200 (blue line) day simple moving averages suggesting the underlying trend bias to be firmly up. The stochastic oscillator is sitting in overbought territory. This suggests that the short term rally might need to catch a breather, but is certainly not an indication to trade against the underlying uptrend.
From a trading perspective, we are hoping for a price pullback from overbought territory to provide a possible opportunity for long entry. A move towards R13.35/$ is considered the long entry opportunity, while a deeper pullback through R13.15/$ (a close below) would negate the suggested opportunity. The upside resistance target considered is R13.98/$.
First appeared on ig.com
