CJS Securities

FX & FI Technicals

Dollar/Rand Weekly Close

What a difference a week makes, and the R15.36 level has become a bridge to far.

After an excellent USD rally ten days ago, we have seen a wild turnaround that has changed the whole outlook for this chart.

We now have SERIOUS double tops at R15.30 / R15.34 on the weekly close and have had a pullback of more than R0.65 intra week.

The R14.48 level, along with all the EMA’s, will provide this chart with some outstanding support, and many will look at this and see a potential inverted H&S, but when you scroll down to the shorter time frames, one will see that this has thrown the cat amongst the pigeons and the next few months will be tough going.

In closing, now is the time for “gorilla warfare” trading, and I would not hold onto a position for more than R0.30 as the ranges will be huge, and the trend for the next few weeks is not your mate!  

The ZAR seems to be following the alternative “last leg up” Euro / Dollar scenario mentioned over the last few weeks.   

 

Dollar/Rand Daily Candle

Carrying on the theme from the Weekly time frame, the Daily chart will be well supported in the R14.50’s for the time being.

The rate at which this chart fell off a cliff would make any base jumper envious, and it’s with this in mind, the move up from the yearly low at R13.3560 is starting to look like a greater correction that has the potential to trade lower.

Nothing, however, has been confirmed yet, and based on this, I am now very hesitant to take any chunky positions in any direction as there are now many different scenarios.

Scenario #1.

The original “this chart will blowout” view is still on the cards as long as R14.50 holds.

Targets will be well over R17.00.

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 would not hold any position now for more than R0.30.

Please don’t wipe yourself out as there will still be plenty of opportunities to come before year-end.     

 

Dollar/Rand 240 min Candle

The way the chart has traded through the cloud looks a little like Thor’s lightning bolt!

Right now there is some support between R14.60 & R14.51 with little chance of a kick at this stage, but lucky we know there will be a pullback, it’s just from where?

I can see no trade here worth taking and would strongly advise staying out until further notice.   

 

Euro/USD Weekly Close

Not only has the $1.16 level held like the Rock of Gibraltar, it now seems almost a “fait accompli” that the correction will see its last leg up north of $1.24 in the coming months.

Once the above move is over, the USD will strengthen significantly, but first, there is much cash to be made playing the Euro from the long side.  

The general view is now long the EURO until we have a daily close under $1.16!

 

 

US Dollar Index Weekly Candle

The DXY now appears to be headed lower before it goes higher in line with the white line road map and off the back of the Euro.

However a print over 97.00 would still see the lows in place and a move well over 107.00!

 

SA Government Bond 30 Year Yield Daily Close

If this 10.30% level does not hold, then all I know is that there will still be a decent amount of downside in this chart over the next 12 months.

The ending diagonal formation is off the table, and right now, I must confess that 9.22% looks very much on the charts.

Having said all of the above, don’t panic!

The chart is now oversold but can continue lower before kicking, but overall, I would expect a kickback to 10.90% before printing the 9.22%, so you should have time, at least I hope so! – ‘I truly hope this ages well.’ 

 

US Government Bond 30 Year Yield Weekly Close

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!