- The US dollar has fallen against the South African Rand during the month of April, which initially had seen the US dollar spike all the way to the 20 ZAR region.
- This is an area that’s been important a couple of times in the past, and obviously is a large, round, psychologically significant figure.
- The first week of April ended up forming a nasty shooting star, and we have fallen pretty much every sense forming that candlestick.
Technical Analysis
USD/ZAR is a market that has been grinding back and forth in a somewhat well-defined range over the last couple of years, and I don’t know if it will change anytime soon. As we fall toward the 50 Week EMA, which is currently sitting at the 18.30 ZAR level, I began to think about the possibility of some type of support coming into the picture. The 18.25 ZAR level has been important multiple times, which sits just below that 50 Week EMA. Underneath there, we have the 17.65 ZAR level which is also backed up by the 200 Week EMA. In other words, this is a market that may fall a bit further, but I think the downside is somewhat limited in this environment, especially as there is so much uncertainty in the world.
Never forget, despite the fact that we have seen a bit of an odd behavior out of the US dollar as of late, the reality is that in times of economic uncertainty, people are much more comfortable holding US dollars, and by extension US treasuries, then they are the South African Rand. The South African Rand needs a more “risk on” attitude to truly soar and strengthen. With all of the uncertainty between the United States and South African, I do think that the downside in this pair is somewhat limited. Do not get me wrong, I don’t necessarily think that the US dollar takes off into the stratosphere, I just think that sometime during the month of May you will see a bounce at one of the previously mentioned levels.
Ready to trade our daily Forex analysis? Here’s a list of the best forex trading platforms South Africa to choose from.