USD/ZAR Price Analysis: Rand looks set to reclaim 19.00 ahead of South Africa GDP
- USD/ZAR drops to the lowest levels in two weeks during four-day downtrend.
- Bears cheer downside break of 100-SMA, previous support line from mid-May.
- 200-SMA can prod South African Rand buyers amid oversold RSI conditions.
- South Africa Gross Domestic Product appears the key data to watch for clear directions.
USD/ZAR bears stay in the driver’s seat for the fourth consecutive day after it refreshed an all-time high in the last week. That said, the South African Rand (ZAR) pair drops to the fresh low in a fortnight while taking offers to 19.21 ahead of the South After Gross Domestic Product (GDP) release, scheduled for publishing at 09:30 AM GMT on Tuesday.
Although the GDP data is less likely to allow the USD/ZAR sellers to keep the reins, technical details are favoring further downside of the quote.
That said, a clear break of the 100-SMA and a three-week-old support-turned-resistance adds strength to the bearish bias about the USD/ZAR pair. The same direct the sellers toward the mid-May low surrounding the 19.00 round figure.
However, the oversold RSI conditions appear to challenge the USD/ZAR bears around the 200-SMA level of 18.94.
Following that, an upward-sloping support line from late March, close to 18.62 at the latest, appears the last defense of the USD/ZAR buyers.
On the flip side, the USD/ZAR recovery needs to cross the previous support line and a one-week-old descending resistance line, respectively near 19.33 and 19.39.
Should the quote manages to remain firmer past 19.39, the 19.40 round figure and the 100-SMA level of around 19.43 may challenge the USD/ZAR bulls.
Overall, USD/ZAR is likely to decline further but the South African GDP has a history of disappointing optimists and the same prods the pair sellers.
USD/ZAR: Four-hour chart
Trend: Further downside expected
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
