USD/ZAR – US Dollar Heading Towards Multi-month Lows vs SA Rand
- USD/ZAR weakening towards multi-month lows
- Risk sentiment lifting emerging market currencies
USD/ZAR weakening towards multi-month lows
USD/ZAR is coming under some pressure these days, albeit at a slow pace, as risk appetite remains firm and the Dollar broadly weakens, whether it against developed or emerging market currencies. The generally weak posturing of USD/ZAR suggests it could weaken in the days and perhaps weeks ahead.
Looking lower, there are a few levels that could soon come into play. The June low at 16.32 is next up as meaningful support, and should it break in favor of new multi-month lows then the rising 200-day MA at 16.08 could become a source of support.
Should we see risk markets turn lower, then look for the ZAR and other major emerging market currencies to rally versus the USD. On the top side, USD/ZAR will need to take out the trend-line from April, rise above 17.53, and ideally in the process of doing this we see strength hold without any strong retracements. If this is the case, the broader picture may show that the move from the April high to now or whenever the decline ends was merely a pullback within a long-term uptrend.
All in all, though, for now still rolling with a bearish bias until price action indicates it is wise to do otherwise. Markets may be a bit choppy as summer trading takes hold. But the summer lull is anticipated to give way to a volatile fall as the US election comes into the spotlight, and risk still appears high that the coronavirus could again become problematic as we move into the fall season.
USD/ZAR Daily Chart (drifting towards June low)
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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.