CJS Securities

FX & FI Technicals

11 October 2021

Dollar/Rand Weekly Close

After a range bound week the chart again struggled to settle over R15.00.

The strong resistance around the EMA’s remain very solid and even Friday’s Non – Farm Payrolls (NFP) could not give this chart any real new direction.   

The trading ranges remain HUGE!

The inverted H&S formation is still in play with targets at R15.78, this is within a much bigger H&S formation which has targets at R11.77.

I have a terrible feeling that this chart will rally and suck everyone in thinking it’s the end of the world again, only to come back down to earth.

All eyes will be on US & Chinese CPI this week. 

 

Dollar/Rand Daily Candle

I wish there was more to add to the commentary but based on the chart’s current formation I feel there is room for a downward correction toward the R14.55 level.

A move down to the R14.55 level would constitute a serious ST / MT buying opportunity IMO.  

With the big inverted H&S formation playing out, Scenario #2 from now 5 weeks ago is still on the cards 

Scenario #2.

The current formation is an irregular flat bear correction that trades back to the R14.20’s, then trades up hard and fast to print between R15.70 – R15.86 to complete the correction while getting everyone and their dog long USD, only to collapse and come down to test the yearly lows and possibly print as low as R11.50.  

Both scenarios will have one wondering because after the ferocity of last week’s fall, there is very little confidence in this chart.

Only a daily close over R15.62 would negate scenario #2.

As with the weekly chart I am now keen to own the USD on a decent pullback that hopefully prints as low as the R14.50’s.

Opportunity beckons in Q4, I can feel it in my bones!

 

Dollar/Rand 240 min Candle

This chart looks like an ugly clown and with skew eyes.

Skew eyes or not the chart is consolidating / correcting and I am very keen to buy the USD scale down from R14.73.

I would now be buying scale down from  R14.73 – R14.49 with a stop over R14.4650.

Targets on this view would be in excess of R15.50 and hence have a minimum RR of 32/10.

Fingers crossed we can execute. 

 

Euro/USD Weekly Close

The $1.16 level was easily breached last week, but I am disappointed as I would have thought that the chart would strengthen significantly.

And its with this in mind that I am starting to think that the chart is creating a triangle with its next support at $1.12952.

NFP did not seem to be a market mover even though the numbers pointed to a weaker USD.  

With the breach, and the market now consistently trading below $1.16, we will take a week or two before looking to enter the market again.

 

US Dollar Index Weekly Candle

Whiplash, while NFP did nothing to move this market.  

The range REMAINS 95 -88 and a dip sub 90 is a buy of note while a rally and daily close over 95 would also get me long and until then we will sit on our hands and wait!

 

 

SA Government Bond 30 Year Yield Daily Close

With  10.30% hold beautifully, the chart has a nice rounding bottom and we could potentially look at targeting the 11.40% level.  

The current formation has more than two potential outcomes and hence we are keen to stay out until we have a better view.  

As predicted, the chart printing 10.90% has played out nicely and with this chart trading higher than expected, the downside at 10.30% should remain very solid.   

 

US Government Bond 30 Year Yield Weekly Close

NFP had zero effect on this chart and the below view is playing out wonderfully!

I would look at buying a move back to 1.90% – 1.80%  that will have upside targets from 2.58% – 2.71%.

Use an SL under 1.70%.

Please note that only a weekly close of over 3.50% will confirm that the trend has been broken.

As for now the downtrend is still intact!