CJS Securities

FX & FI Technicals

18 October 2021

Dollar/Rand Weekly Close

I am very happy with the chart’s current structure and how it is playing out for now.

The chart made a 50% re-tracement down to R14.57 and found great support  at the 233 week EMA.

The trading ranges remain very big and if there is one thing the last few months have shown it is that the patient trader comes out on top with regards to Dollar / Rand.

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.

IMO the MT low is in and that we will see the chart start to rally before the election, however I will only be proven correct on a Weekly Close over R14.94.

 

Dollar/Rand Daily Candle

As previously mentioned I felt the chart would pullback to R14.55 and that this would be a great buying opportunity.

The chart traded as low as R14.57 and has subsequently turned around, but you will recall the “Quick Fire” update posted Thursday stating that I would be a buyer from R14.78 scale down and so far this seems to be paying dividends.  

Furthermore I can’t add anything to the below other than to change the greater formation, but the outcome remains the same.

Scenario #2 from now 6 weeks ago is still on the cards, although I have changed the irregular flat formation into a classic correction but the upside targets remain intact.  

Scenario #2

The current formation is a “classic correction” that trades back to the R14.50’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.  

Only a daily close over R16.00 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 is here, seize it with both hands.  

 

Dollar/Rand 240 min Candle

#No Change in Commentary  

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

I remain disappointed with this chart as I would have thought that the breach of $1.16 would induce a violent move lower.

And its with this in mind that I am starting to think that the chart is creating a triangle or a classical correction, but TBH I am pretty confused.

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

#No Change in Commentary  

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

#No Change in Commentary  

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

#No Change in Commentary  

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!