- USDZAR has risen today to trade at its highest level since mid-April
- USD resurgence as well as possible South African downgrade behind the move
- Technical outlook becoming more favourable for longs
A combination of factors have contrived to push the USDZAR higher of late, with the pair today rising to its highest level since the middle of April. The USD has been making a steady recovery in recent weeks since the last Fed meeting and one of the clearer moves higher for the buck has come in this cross.
On the other hand the South African rand (ZAR) has come under some selling pressure with economists warning that the possible 3bn rand bailout of South African Airlines will not risk irking ratings agencies and could put the country’s credit rating under further pressure.
The USDZAR has been rising in recent weeks and is looking to end the downtrend seen over the past 18 months. Source: xStation
Looking at a weekly chart, the USDZAR is looking to post a fourth consecutive week of gains. The downtrend seen since the market peaked above 18 back in January 2016 has arguably ended with the 8 and 21 period EMAs turning positive.
USDZAR has made a strong break higher so far today. Source: xStation
On a daily time frame today could be seen as marking a breakout, with price moving above 13.64 which has previously acted as resistance. A daily close above here would be a further confirmation of the break and should price take out the April high of 13.95 in the coming sessions then the chances of further gains will greatly improve. Alternatively if price falls back below 13.64 then the prior range which has defined the price action for the past 5 months remains in tact with the low of 12.40 a level to watch for potentially key support.