- The US dollar has initially rallied against the South African Rand during trading on Tuesday, but it looks like we continue to see a lot of choppy and noisy behavior.
- The market is sitting right around the 50-day EMA, which is an indicator that a lot of people pay attention to, and you could make an argument that perhaps from a technical analysis standpoint, offered resistance during the session.
- Underneath, we need to look at the 18.25 level, which has been both support and resistance in the past, and it’s now hosting the 200 day EMA as well.
As we are sitting between these two moving averages, it typically means that we are about to see some type of noisy move. In general, I think this is a market that is probably a lot of noise waiting to happen, mainly due to the fact that there are a lot of things being paid close attention to in South Africa by the US government and potential tariffs. That being said, this is a market that quite often will move up and down with risk appetite and quite often it is very difficult to get your handles because it moves so choppy and erratically.
On a Move Higher
If we can break above the 18.50 level, then I think the US dollar probably climbs to about 19 or so. If we break down below the 200-day EMA, it could open up a move down to the 18 level, possibly even 17.65. Longer term, it’s a little bit cloudier. You can see just how noisy this pair has been over the last, say, two years on a longer term chart, but as things stand right now, I think the most important price on this chart is $18.25 and whether or not it holds as support.
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