~ Week Of July 4th 2016 ~
Will Support Hold?
Published by Jay - July 3rd 2016
In the late 50's to early 60's the South African rand, as represented by the code "ZAR," was officially established as legal tender. The rand takes its name from the ridge upon which Johannesburg is built and from where most of South Africa's gold deposits were discovered.
Looking at the daily chart of the USDZAR currency pair, we can see that price clearly rejected the upper resistance level as denoted by the large wick of the bullish candle. Two days later on the back of this rejection, the market clearly told us to sell as price reversed and closed strongly. With a nice progressive move down occurring prior to this signal, this created minimal congestion to the left and lent itself to the fact that a short trade from this area was a low risk move with a good risk to reward ratio.
As the market heads into the lower support area that has been respected multiple times in the past, we will take note of this pair in the new trading week ahead for any signals to go long.
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