Johannesburg — A FEW weeks ago I suggested that there's a glimmer of light at the end of the deep dark tunnel and that businesses, hanging on by their toes, should tighten their grip.

The Zew Centre of European Economic research, based in Mennheim, Germany, has spotted a similar glimmer in its March survey of 290 analysts and investors, mostly Germans. Bearing in mind that the Germans are conservative, and possibly the most prudent of the euro-zone partners, its reading of the situation holds much weight.

At home, the bringing forward of the next monetary fund meeting and staging future meetings at monthly rather than two monthly intervals suggests that rates will be reduced in small bites rather than less frequent gobbles. Small bites are fine and their effects easy to monitor. Taking my family's small business as an example, with a little more money in consumer pockets from two rate cuts, and a drastic fall in the petrol price, while still toe hanging, turnover has already perked up. The negative cloud on the horizon is oil cartel Opec's further production cut threat, but rather than a rise, charts indicate a possible further fall in the oil price.

As for share markets, Germany's DAX, the JSE overall, FT 100, Hang Seng and the Dow Jones industrial index have broken upwards through their moving average convergence /divergence (MACD) moving averages signalling short-term buying positions.

As Europe is our biggest trading partner, its fortunes play a significant role in SA's economy and the rand's value is loosely linked to the euro.

Last week, on news that the US is cranking up its monetary printing press, so devaluing its currency, the euro grabbed back a substantial portion of its recent losses against the dollar, and so did the rand.

A break in the euro's point-and-figure chart gives a count to about $1/ € 0,60 compared with the current rate of $1/ € 0,73. The rand's similar break suggests a count to about $1/R7,6 compared with $1/R9,5.

To illustrate the rand's link with the euro, I have superimposed the euro/dollar plotting above the rand/dollar plotting. While the rand exchange rate tends to be the more volatile than that of the euro, the two currencies have been moving together against the dollar since July last year.

I've encased the rand plotting in a Bollinger Band which is plotted at standard deviation levels above and below the 20-day moving average. The chart shows how both the euro and rand have gained over four days last week, the rand 9,10% and the euro 7,43%. Theory holds that when a price moves out of the band, as the rand plotting has, a continuation of the trend can be expected.

The JSE overall index gained 14% last week, and given a count to 24259. In anticipation of a rate cut, general retailers were in demand, pushing the index upward to its MACD moving average. Rising from an oversold position, Foschini's Cycle Trend future chart shows a slight dip followed by a strong rally.