Good day traders! The USD/ZAR reversed lower after reaching an upper warning line (red arrow) on the 6th of April. Price then reverted to the center median line of the same pitchfork and found support.
After the first high that reached the upper warning line, price touched the warning line a second time around but created a lower high. Soon after the USD/ZAR was knocked sideways and created a triangle formation before a stronger decline followed.
That decline found support at a confluence of the smaller pitchfork’s lower warning line and the previous mentioned center median line.
Pitchfork Tip: When you draw a pitchfork, where one of the anchor points include a triangle formation, then it is often a good idea to anchor one of your pitchfork points to the termination point of the triangle – like on the chart above.
Just because price found support at those confluence lines does not mean that a low is in place but should the USD/ZAR manage to break above the center median line of the green pitchfork around 17.3442, then we could potentially see price head higher towards the center median line of the blue pitchfork again at around the 17.8450 level.
Alternatively, the USD/ZAR might test the lower median line of the larger pitchfork again before the next bullish phase takes hold.
More updates to follow.
Potential targets: 17.3442 and 17.8450
Until next time, have a great day and stay safe!