Gold pulls back from over two-month high amid rising oil, caution ahead of CPI
In our last report we noted:
- Bullish USD/ZAR view was maintained
- The short term high at R13.77/$ was the initial target favoured
- R13.98/$ provided a further upside target
- A pullback towards the R13.42/$ was still considered a viable long entry opportunity for traders not already committed to the long side
- A close below trend line support ($13.30 at the time of writing) considered the failure of the bullish setup
Since our last report, the USD/ZAR currency pair has managed to trade through the R13.77/$ mark to reach a high of R13.86/$, not yet reaching the further upside target of R13.98/$. Circled blue we see a bearish engulfing candle pattern which has marked a short term top before the first real pullback from overbought territory had started.
The current pullback could be providing the new opportunity for long entry. We await a new bullish price reversal from between current levels and the R13.30/$ mark. Should this occur, the short term high at R13.86/$ becomes the new initial upside target favoured, followed by the original resistance target of R13.98/$. In this scenario a close below the reversal low would be used as the failure level. Should the currency price move close below the R13.30/$ mark before a bullish reversal occurs, the long entry idea would need to be reassessed as the uptrend may have lost significant momentum.
First appeared on IG.com
