USD/ZAR Technical Outlook: Dollar Nearing Towards Long-term Support vs Rand
- USD/ZAR falling into trend-line dating back to early 2018
- Approximate confluence with weekly prices back a couple of years
- With the context of the long-term trend may still be a broad pullback
USD/ZAR has continued its run of weakness as of late, with it now bringing into play an important trend-line dating back to the early part of 2018. The trend-line is in rough alignment with a pair of peaks created during 2018 and 2019.
This makes for an interesting spot to watch a price rejection as the potential lies for a floor to be created with the scope of the longer-term trend. The decline off the coronavirus spike high has been deep, but doesn’t necessarily mark the end of the bull market.
A turn higher soon off support could warrant using the pivot low as a spot of reference for both longs and shorts. Would-be longs could use it to assess stop placement while would-be shorts could use to determine whether to keep pressing short bets.
If the line were to fail there is a much longer dated one extending up from 2011 near 14 that could be targeted. In either event, whether we see a hold nearby support and turn higher, or break below and more weakness, we are at a cross-road that could shaping trading in the weeks ahead.
USD/ZAR Weekly Chart (2018 trend-line)
USD/ZAR Daily Chart (watch for signs of a forceful rejection from support)
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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.