From our previous article on USDZAR Daily Chart Analysis, our focus was the reverse head and shoulders formation. The pattern had just had a breakout, we were looking at possibility for a false beak out or retest for continuation.
Let’s now look at the chart below for current price action
As per analysis form previous article, price has come back an retested the Neckline with major trendline T holding. This is A reaction description in the previous article.
So, here is a retest on neckline now! Can it hold and complete the reverse head and shoulders target at resistance marked R? There are several levels that can hold price along the way. This is the focus of todays article.
From the above chart, price is into mid channel resistance zone marked H. If daily candle closes beyond this resistance zone the immediate target will be channel resistance trendline marked K. So from K there is previous highs, P as immediate target
It’s the reaction after previous highs P, that will see the reverse head and shoulders complete into the resistance R. Meanwhile at all these levels (Resistance H, K & P), keep close eye on Trendline T.
Trendline T should hold for this reverse head and shoulders setup to stay viable. Break of trendline T will require a new outlook!
USDZAR Daily Chart Analysis on lower TF
This USDZAR daily chart analysis current price action is clearer on smaller time frame (TF). Since we’ve had a daily candle retest, we can drop down to H4 to look for any patterns for continuations.
Take a look at the 4-Hour Chart below;
From the chart above we just waiting for reaction on H zone to immediate target K. Then reaction on K into previous highs H and so on.
Keep in mind setup remains valid if price keeps above major trendline T
Conclusion:
Since we have a daily candle retest, trading can be done on on 4-Hour chart. Watch reactions on the highlighted resistance zone levels. And setup remains valid if price doesn’t break trendline T
