As unfortunate as it is, South Africa's economy has taken a hit this past quarter with the Moody's downgrade being announced last week and a further hit due to COVID-19. However, we as traders capitalise on such when this aligns with the technicals we see on the charts. We work to secure our bag.
According to the latest COT report, large speculators are increasing shorts on the ZAR and as a result we were waiting for a long entry on the USDZAR. We took an entry last week where we saw confluence on the D timeframe with what we had on the weekly which was the Impulse-Correction-Impulse pattern signaling a potential push to the upside. We waited for an entry after the 0.382 retracement. For those who missed that first opportunity, we are waiting for a second entry at he restest of the previous D high.
According to the latest COT report, large speculators are increasing shorts on the ZAR and as a result we were waiting for a long entry on the USDZAR. We took an entry last week where we saw confluence on the D timeframe with what we had on the weekly which was the Impulse-Correction-Impulse pattern signaling a potential push to the upside. We waited for an entry after the 0.382 retracement. For those who missed that first opportunity, we are waiting for a second entry at he restest of the previous D high.
Trade closed: target reached:
For the past 2 consecutive weeks we have taken profitable trades on the USDZAR. This week the USDZAR let up a little with a push to the downside. However, large speculators have not closed their short positions on the ZAR so this could just be a corrective move before the next push to the upside. We are now approaching the level at which we took the second entry and so now we will be waiting for markets to make another push to the upside once our rules for entry are satisfied.