USD/ZAR – How Much Further Does Dollar vs Rand Sell-off Have?
- USD/ZAR showing continuation after support break
- Will need to firm up soon else more losses likely
USD/ZAR showing continuation after support break
USD/ZAR has been steadily sinking since breaking support back on May 21. This is in line with ZAR rallying alongside other emerging market currencies and even developed market currencies as of late. It is a full-on USD sell-off at this point that looks to have some more room.
At this time there isn’t great immediate support for USD/ZAR, as no visible levels are in the vicinity. You have to go down a good bit before finding price support via the 2018 high at 15.69 and the 200-day moving average at 15.78. If we are to see more weakness to that point then would-be shorts should get another decent look to enter.
Ideally, we see a small bounce/consolidation pattern develop to work off short-term oversold and provide a framework for managing entries and risk. Will be watching how the lower parallel (it’s not the strongest technical signpost yet) and how price behaves around it. If it starts to exhibit influence then the line will get upgraded in value.
At the immediate moment risk/reward on new trades isn’t ideal in either direction, but with a little patience that could change in the days ahead.
USD/ZAR Daily Chart (path of least resistance lower)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.