After trading in a wide range for about two and half months, roughly between the 21.12 and 26.66 levels, the iShares Brazil Index ETF (EWZ) finally managed to get out through the upper bound of that pattern. If we look at our 4-hour chart, we can see that yesterday, the index ended its trading above the 200 EMA, which might be taken by some buyers as a positive sign. For now, we will take a bullish approach and aim for slightly higher areas.
A further push north may send the price to the 29.44 hurdle, which is the high of March 13th. Initially, the ETF might stall there for a bit, or even retrace slightly lower. That said, if EWZ continues to float above the upper side of the previously-discussed range, at 26.66, that may attract new buyers into game and help the index to rise again. If this time the 29.44 barrier fails to withstand the bullish pressure and breaks, this would confirm a forthcoming higher high and the next possible resistance zone could be at 32.83, marked by the high of March 10th.
Our oscillators, the RSI and the MACD, are still pointing higher, which supports the above-discussed scenario. Also, the RSI is above 50 and the MACD is well above zero and its trigger line.
Alternatively, a drop back into the range could spook the bulls from the field for a while. If the price continues with its journey south and falls below the 24.97 hurdle, which is the high of May 21st, that may attract even more sellers and send EWZ lower. We will then aim for the 23.02 obstacle, a break of which might set the stage for a re-test of the lower side of the aforementioned range, at 21.12.
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