The current action on the USD/ZAR confirms the strengthening trend of the Rand. The long term trend is intact. It will take a break above 6.90 to change this view.
The ASX confirmed support today. We will have to wait and see if this index can break above previous resistance at 4880. The ASX usually gives an indication of what to expect locally.
Here we are seeing warning signs of a larger correction to come. We now have a "compound divergence" on the RSI, while the index is trading in a possible "rising wedge" pattern. This combination is a reliable warning that a correction is imminent.
Shorter term traders should consider pulling their stops to under the last support level. We expect it to be a correction in a longer term bull market, so it will be a buying opportunity.
