USD/ZAR - Anticipation of a Breakout But Which Direction?

USD/ZAR is experiencing what I would call a choppy market at the present time. In times of choppy markets my suggestion is always to look at other opportunities in the market. As a backdrop in terms of fundamentals there is a lot of uncertainty in the markets as it relates to emerging market currencies. The China trade war is playing heavily into this uncertainty. In light of the fundamentals, we know that we keep the fundamentals in mind as we trade the technicals. Given this lets look at the technicals and what do we see?

- We see price is sitting on a very strong level of support, and is currently trading within a range.
- We see price is still sitting above the 200 MA and the 200 MA which tells us that for now price is holding ground above the very next key level of support.
- We see price is trading and consolidating on a higher timeframe within a pennant (note trendlines)
- We know that the longer the consolidation within a pennant on a higher timeframe especially, we can expect there to be a massive breakout. In which direction though? Only time will tell.

- As we continue to study this pair, we could possibly have two scenarios:
1. Price if price breaks out to the upside, given the previous consolidation, I would expect a massive breakout to the upside to higher highs as noted (remember the massive breakout a couple of weeks ago? Perhaps just like that..not definite but perhaps).
2. If price pushes beyond support to the downside, given the previous consolidation, I would expect a breakout to the downside towards the next key support as noted.

For now I say, watch, study and be ready to take advantage of the breakout when it happens, as it breaks out of the pennant.

Please refer to my previous studies on price action, key zones, and how to study the markets using price action study.

I now offer one-on-one mentoring sessions where we will together study the markets and you will learn how to trade price action and understand market structure. If interested please inbox me for information. Spaces are limited; For individual sessions, I have space just for a few more students, as I like to take the on-on-one time to spend with each individual. Group sessions are also available, if you would like to get a small group of students (3 to 5), and you can take advantage of lesser group rate. I really enjoy studying the market and sharing with others. As we study I will share certain e-books and educational material that I have as we learn this market together.

Thanks for studying along! Always use proper risk management, use your confluences, and wait for confirmation before entering any trade. Conserving capital is very key.