ZAR/JPY 1H Chart: Channel Down
The South African Rand has depreciated substantially against the Japanese Yen within the last six weeks, thus forming a channel down - valid for most of this downfall. As apparent on the chart, the rate failed to reach the bottom channel boundary in its last wave down and, subsequently, breached the upper line mid-session. This failure was an early indication that the momentum downwards was allaying, especially when a new up-trend took the upper hand. Other indicators are likewise turned bullish, adding some ground to the assumption that a surge may be due. However, more green candles are still necessary to confirm that the pair will not to return in the channel down. By and large, the pair is likely to follow the junior channel, and in case of a strong momentum north, the steepness of the up-trend will shift to the upside.
Trade closed: stop reached:
After the sharp hourly jump on August 7, the rate was unable to edge higher and remained in a relatively stable position.
Consequently, the sharp decline the following day resulted in the Rand reaching the upper channel boundary.
Thus, a retracement is expected to occur either at the 100-hour SMA at 8.30 or the 200-hour SMA at 8.35.
Consequently, the sharp decline the following day resulted in the Rand reaching the upper channel boundary.
Thus, a retracement is expected to occur either at the 100-hour SMA at 8.30 or the 200-hour SMA at 8.35.
The South African Rand was trading in an ascending channel against the Japanese Yen for the last five weeks. During the time, a junior channel down was also formed. Shortly prior to the breakout of the senior pattern, the pair was starting to decrease its trading range, thus forming a minor falling wedge.
The Rand is currently trading between two significant barriers, namely, the monthly PP and the weekly S1 at 8.33 and the 55-, 100– and 200-hour SMAs and the 50.0% Fibonacci retracement circa 8.40. The rate has failed to surpass the latter since September 18 which might suggest that the bottom barrier is more likely to surrender. The closest downside target is the 38.2% Fibo near the 8.33/32 area.
On the other hand, the rate might still continue to trade sideways in the same range until the 8.40 mark is re-tested by the end of this week.