USD/ZAR Technical Analysis – Dollar Backing Down into Support vs Rand
- USD/ZAR weakening in trend support of various degrees
- Broadly speaking range conditions may persist on snapback
USD/ZAR weakening in trend support of various degrees
After failing to fully develop and trigger the bull-flag discussed last week, another few days has brought USD/ZAR to an inflection point that could become meaningful in the days/weeks ahead. The trend-line dating from the first trading day of the year is running up under current levels.
It’s not the sturdiest trend-line yet with it only having the basic requirements to create a trend-line (two connecting lows), but could become more impactful if we see a third price point develop on a lift from here. A rally from trend support doesn’t necessarily give USD/ZAR a strongly bullish tilt, but it does keep sellers in check.
And even if we see the trend-line break, there is another threshold of support not far below that could be even more meaningful. The June and July lows are in confluence with the rising 200-day MA, making the 16.42/32 area significant.
For would-be longs, the 2020 trend-line and support just below it offers traders two potentially solid risk/reward spots to look for entries. For those looking to initiate shorts, risk/reward doesn’t appear very ideal given support is support until it’s not.
USD/ZAR Daily Chart (2020 trend-line/confluent support)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX