After finding support near the 13.199 level on January 31st, USD/ZAR reversed higher and kept on pushing in the upwards direction. The rate now sits above a short-term upside support line taken from that reversal date, but today the pair is struggling to overcome yesterday’s high at 13.843, which means that USD/ZAR might correct slightly lower. But as long as the rate remains above that upside line, we will continue targeting higher levels in the near-term.
As mentioned above, there is a possibility of seeing a bit of retracement back down, where a good potential support zone to watch out for could be the 13.700 mark, which is the high of February 8th. Slightly below runs the aforementioned upside line, which could also provide additional support for USD/ZAR-bulls, in case the rate falls a bit below the 13.700 hurdle. If, at that point, the rate rebounds and starts picking up the upside momentum, USD/ZAR could easily get back to the 13.843 barrier again, a break of which may open the door to the 13.979 obstacle, marked by the high of January 22nd.
Looking at our oscillators, the RSI and the MACD, both are somewhat in support of the idea of seeing a small throwback first before another leg of buying. The RSI had topped near 80 yesterday and now points to the downside. The MACD has also reversed slightly to the downside, but still remains in the positive territory, balancing around its trigger line.
Alternatively, a break of the above-mentioned upside support line and a drop below the 13.575 support area could be the signal that more bears have been waiting for, in order to jump in and drive USD/ZAR lower. This is when we will start looking at the 13.438 hurdle, as the pair’s next potential obstacle, a break of which could put the possibility of testing the 13.336 level back on the table. That level was last time seen acting as a good support zone on February 5th.
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