Looking at the technical picture of the iShares Brazil Index ETF (EWZ) on the 4-hour chart, we can see that the price is stuck in a small range, roughly between the 20.09 and 26.45 levels. After rebounding from the 20.09 hurdle, which was tested on March 19th, EWZ started forming higher lows. However, in order to get comfortable with slightly higher areas in the near term, we would like to see a break of the upper side of that range first, but for now we will stay cautious and remain neutral, at least for now.
A break of the 26.45 barrier would confirm a forthcoming higher high and could lead the index to some higher levels. That’s when we will target the resistance zone between the 29.01 and 29.81 hurdles, marked by intraday swing highs of March 13th and 11th respectively. The ETF could stall there for a bit, or even correct lower. That said, if the index remains above the 26.45 area, the bulls could take advantage of the lower price and lift it up again. A break of the aforementioned resistance zone would confirm another higher high and we may then target the next resistance level at 32.83, which is the high of March 10th.
The RSI and the MACD, on the 4-hour chart, seem to show willingness of moving further north. The RSI is above 50, although has flattened somewhat. The MACD looks a bit more promising for the bulls, as it still points higher, while sitting above its trigger and zero lines.
Alternatively, if the 26.45 barrier continues to provide decent resistance and the price slides back below the 24.34 hurdle, which is yesterday’s low, this could make the buyers worry, as such a move could increase EWZ’s chances of moving lower in the near term. If so, the index could drift to the 22.94 obstacle, a break of which could open the door for a test of the current lowest point of April, at 21.33. The price may get a hold-up there, but if the bulls are still overshadowed by the bears, this could send EWZ even lower, possibly aiming for the lowest point of March, at 20.09.
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