The wedge continues...

Feb 4

The rand folded on Friday after the broad-based rise in the dollar. The rand managed to pull the pair to a low of 18.53 but this support rate held its ground. The pair still remains in the wedge pattern between the two blue trend lines and technically the higher low is not positive for the rand. I’m expecting a re-test of the 61.8% Fibo rate of 18.97 this week and a break above will allow the pair to inch back into the red resistance range between 19.15 and 19.28. For now, it’s too early to determine whether the pair is going to break to the top or bottom side of the current wedge but I’m leaning towards a break to the downside based on the expectations that the Fed will cut rates in around March.