Looking at the technical picture of the iShare MSCI Brazil ETF (EWZ) on our 4-hour chart, the index is currently balancing above all of its EMAs, which might be seen as a positive. Also, the ETF is trading above a short-term tentative upside support line taken from the low of March 9th. But before the price could go higher, it would first need to overcome an important resistance area between the 34.51 and 34.80 levels, marked by the highest point of March and the high of February 24th respectively. For now, we will take a cautiously-bullish approach.
If, eventually, the index manages to overcome the above-discussed resistance area between the 34.51 and 34.80 levels, this may attract more buyers into the game, as a forthcoming higher high would be confirmed. EWZ could then travel to the 35.26 obstacle, or to the 36.10 zone, marked by the high of February 19th, where the upmove may get halted for a bit. We could even see a small correction lower, but if the index manages to remain somewhere above the March high, new buyers might step in. If so, the ETF may travel back north again and if this time it is able to overcome the 36.10 obstacle, the next possible target could be at 36.85, marked by the highest point of February.
The RSI is a bit flat, but remains above 50. This oscillator, although it is showing positive price momentum, is somewhat in support of the idea of waiting for a breakout first. The MACD is a bit more reassuring in terms of the upside, as it runs above zero and its trigger line, while pointing higher.
Alternatively, if the price suddenly violates the aforementioned upside line and drops below the 32.58 hurdle, marked by the current lowest point of April, this may signal further declines. EWZ could slide further south towards the 31.85 obstacle, marked by the low of March 29th. If the selling continues, the next possible support area might be between the 30.47 and 30.62 levels, which mark the lows of March 3rd and 9th respectively.
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