Great British Pound against the South African Rand is a very interesting pair for Trend Traders, lets find out why.
Below is a chart for the monthly timeframe, this provides us with a birds eye view on how GBPZAR has performed previously. Always remember the best way to identify key trading areas is to analyse past Price Action.
As you can see this pair has shown some resistance around 16.50000. The first rejection was at the beginning of 2008 where price reached 16.50000 and retraced in the following months. The second rejection occurred later on in the same year and is clearly identified by a huge shooting star candle. Currently this pair has has pulled back after a long uptrend and has tried to retest the previous established resistance.
Now we understand the bigger picture we will take a closer look into the weekly timeframe.
We have circled a shooting star which was a clear indication price was going to pull back from the uptrend. Price has created lower highs and low lowers which is clearly projected on the chart, this is further confirmation of the downtrend. The final evidence we have to confirm the downtrend is the price is currently trading below the 200 Moving Average and has respected this line by the last Lower High. This pair is still trading between the price high and low of 2016 and we will be awaiting a break out of these areas before a considering an entry.
For all trend traders this is definitely one for the watch list, just remember to be patient and let the trade come to you.