Rand strength has seen USDZAR on the backfoot lately. Of interest is the failure to break above 12.50.
So looking at the weekly there are two ways to read this.
1) We have seen an equal legs ABC correction into the 12.38 level. Problem with this is the absence of a pin bar at the lows of end Dec 2017 and the first week of Jan 2018
2) We have a head and shoulders pattern and based on the break of the neckline we have a target of 11.2750 (with 10.3850 in extension depending on your view of what the historic USDZAR high really was).
A weekly close above 13.75 negates
Reward:Risk on a short trade of 1.24:1 is not great given downside Rand risk. Rather if seen, 11.27 and 10.38 are good levels for long term long USD/ZAR trades
So looking at the weekly there are two ways to read this.
1) We have seen an equal legs ABC correction into the 12.38 level. Problem with this is the absence of a pin bar at the lows of end Dec 2017 and the first week of Jan 2018
2) We have a head and shoulders pattern and based on the break of the neckline we have a target of 11.2750 (with 10.3850 in extension depending on your view of what the historic USDZAR high really was).
A weekly close above 13.75 negates
Reward:Risk on a short trade of 1.24:1 is not great given downside Rand risk. Rather if seen, 11.27 and 10.38 are good levels for long term long USD/ZAR trades