Technical Analysis – EURZAR advances 11% to 11-month high
Posted on August 12, 2019 at 3:52 pm GMT
Anthony Charalambous, XM Investment Research Desk
EURZAR recovered its recent downfall and rallied to an eleven-month high of 17.313. It’s worth mentioning that in the short-term, a bullish cross of the 20-day simple moving average (SMA) with the 50-day SMA could reinforce the up move.
The price is above the Ichimoku cloud and the RSI is increasing in the overbought region, suggesting that the bullish action may further strengthen. The ADX is indicating that a strong bullish trend is in place. However, some caution for a downside correction may be warranted in the case that the RSI begins to exit the overbought area.
To the upside, if the bulls manage to keep the price above the previous peak of 17.076, a stretch further could have 17.059 be tested, which is the 138.2% Fibo extension of the down leg from 17.0760 to 15.4190. Extending the climb north could bring the 161.8% Fibo of 18.100 to the table.
In the negative scenario, a downside correction may find nearby support at the 17.076 previous high and ahead of the 16.700 level. If losses continue, then the 16.3890 support may interfere with the fall, where the boundary of the Ichimoku cloud also lies. Surpassing the cloud and 50-day SMA, the price could retest the uptrend line, once it pierces the 16.040 and 15.650 barriers.
Summarizing, the bullish bias prevails in the long-and short-term, and only a breach below the uptrend line could turn the short-term bias from neutral to bearish.