Blake Morrow’s Chart of The Day – May 20th 2021
The SPX bounced back firmly by EOD ignoring the carnage of the crypo moves today. Many people are scratching their heads, but one of the things I have noticed in recent days is despite the move lower in “stocks” that the EM (Emerging Market) currencies have held up well. And that makes sense to me. When stocks are stronger, so are EM currencies (typically). But the USDZAR is on my radar as it is setting up a reversal pattern, or a descending wedge. RSI is divergent which should make bears a little nervous too. Another observation is the pair not breaking 2019 lows (yet) has also been surprising following the 2021 continued melt up in risk. A move above the descending trend line and horizontal resistance at the 14.2000 level could signal a shift in risk appetite? My radar is up and on now.