USD/ZAR Price Analysis: Hits fresh two-month low, focus on 50-hour SMA hurdle

Omkar Godbole FXStreet Contributor

South African Rand is again drawing bids and pushing the USD/ZAR pair lower. The currency pair is currently trading near 17.30 – the lowest level since March 27 and reporting a month-to-date loss of 6.57%. On a week-to-date basis, the pair is down by over 1.5%.

The daily chart MACD histogram is printing deeper bars, confirming the bearish trend. The relative strength index (RSI), too, is reporting bearish conditions with a below-30 print. As a result, a deeper drop to the support of the trendline rising from Jan. 23 and March 4 lows cannot be ruled out. At press time, that trendline support is located at 17.24.

Acceptance under the trendline could invite stronger chart-driven selling, possibly leading to a decline to the 100-day simple moving average (SMA) of 16.715.

The immediate bearish view would be invalidated if and when the pair establishes a strong foothold above the descending or bearish 50-hour SMA. The pair has charted multiple lower highs along that SMA over the last one week. The 50-hour SMA is currently stationed at 17.4259.

Daily chart

Hourly chart

Trend: Bearish

Technical levels

1. R3 17.7057
2. R2 17.6209
3. R1 17.4999
PP 17.415
1. S1 17.294
2. S2 17.2092
3. S3 17.0882

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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