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Bull Signal in U.S. Dollar /Rand

Currencies / Forex Trading Jul 10, 2009 - 09:45 AM GMT

By: Seven_Days_Ahead

Currencies

Best Financial Markets Analysis Article In Tuesday’s FX Trading Guide we noted several bullish clues in the USD/ZAR chart. We had switched from a Bearish to Sidelined stance and now, following the gains seen this week, we are able to Go Bullish.


The FX Trader’s view


WEEKLY CHART:

On this chart we have been keeping an eye on the 76.4% retracement of the 2007/2008 upmove.

So far it is providing support.

 

DAILY CHART:

As well as the 76.4% level (Weekly chart) we had marked in a Fibo projection at 7.6000 several weeks ago.

Note the positive RSI divergence and, equally important, the chart structure of the last two months which has the classic look of a mature stage.

The recent close above the s/term falling resistance line has given an initial bull sign/ trigger.

The initial upside target is the 8.7788 15-May high – we will look at retracement levels in next week’s Guide – there are enough lines on this chart for now.

Buyers on dips into the 7.9500/7.9000 area will likely favour initial stops just below the 7.6200 01-Jul low, seeking partial profits around 8.3400/8.3500 then raising stops to cost.

Our Recent EUR/GBP Update: Last Thursday’s Update favoured a s/term recovery in this cross, and we still look for this. Later that day the suggested 0.8535/15 buy area was reached. Longs continue to target 0.8800 for partial profits, but we already favour stops rising to 0.8499 to minimize loss now. Note how well s/term resistance from the 0.8636/55 area has worked so far this week.

Philip Allwright
Mark Sturdy

Seven Days Ahead
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Mark Sturdy, John Lewis & Philip Allwright, write exclusively for Seven Days Ahead a regulated financial advisor selling professional-level technical and macro analysis and high-performing trade recommendations with detailed risk control for banks, hedge funds, and expert private investors around the world. Check out our subscriptions.

© 2009 Copyright Seven Days Ahead - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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