Before the Fed minutes of meeting is released, we shall focus on the CAD and how it is benefiting from the surge of oil prices. It did benefit and the Loonie recouped some of the earlier losses against the green back. If it continues this way, we can only interpret that the market is expecting some awesome news after next week’s OPEC meeting.
Other than that, the market appears to be thin because of the Thanksgiving holiday but that is not preventing the Euro from inching higher. Recent news indicates that Angela Merkel’s party is progressing positively with the Social Democrats and a grand coalition party will likely be formed. Such news is pro-Euro especially at this time where Brexit negotiation is in progress and the recent Catalonia secessionist agenda. The Euro rose after wards.
Today, we shall look to buy the Euro and sell the Rand. In the monthly chart, there is a buy signal and %k and %d are almost parallel. In the 4HR chart, stochastics are turning from the overbought territory with a buy signal in place. Notice that since the week opened, the ZAR has been rallying but the stochastics were mixed and not reflecting the steady price action lower lows. After this bullish candle we shall initiate longs and aim for a 1:3 risk reward ratio.
We shall trade as follows:
Stop Loss: 16.28
Take Profit: 16.65
Have a good trading day.