- USD/ZAR retreats from all-time high to pare the biggest daily gains in a year amid overbought RSI.
- 18-month-old rising trend channel keeps South African Rand sellers hopeful.
- Previous resistance from March restricts immediate downside ahead of 10-DMA.
USD/ZAR takes offers to refresh intraday low as it steps back from the all-time high marked the previous day. In doing so, the South African Rand (ZAR) pair drops 0.25% intraday to 19.75 heading into Friday’s European session.
That said, the USD/ZAR pair marked the biggest daily gains in a year the previous day as it crossed an upward-sloping resistance line from March, now immediate support near 19.70. However, the overbought RSI (14) allowed South African Rand traders to lick their wounds within a 1.5-year-old rising trend channel bullish formation.
Hence, a two-month-old resistance-turned-support line, around 19.70 restricts the immediate downside of the USD/ZAR pair ahead of highlighting the tops marked earlier in the month around 19.52 and 19.51.
In a case where the South African Rand recovers beyond 19.51, the 10-DMA and an upward-sloping trend line from October 2022, close to 19.33 and 18.80 in that order, could challenge the pair sellers.
On the flip side, the 20.00 psychological magnet lures the USD/ZAR buyers ahead of the stated channel’s top line surrounding 20.12.
Overall, the South African Rand remains on the bear’s radar despite the latest pullback.
USD/ZAR: Daily chart
-26052023-638206751313336365.png)
Trend: Pullback expected
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD battles 1.0700 after mixed Eurozone data
EUR/USD has come under renewed selling pressure, battling 1.0700 after mixed Eurozone Retail Sales data for April. The pair remains undermined by the cautious market mood, disappointing German Factory Orders and a broad US Dollar rebound.
GBP/USD turns south toward 1.2400 as US Dollar recovers
GBP/USD is heading south toward 1.2400, meeting fresh supply in the European session. The US Dollar is seeing renewed safe-haven buying amid a risk-off market profile, acting as a headwind to the pair.
Gold struggles for a firm direction, stuck in a range around $1,960
Gold price struggles to capitalize on the previous day's modest recovery from the 100-day Simple Moving Average (SMA) and oscillates in a narrow trading band through the first half of the European session on Tuesday.
Is the metaverse hype back in action?
Although there are no major macroeconomic events this week, investors can expect massive volatility on a daily basis. The reasoning behind this outlook is that Apple will be conducting the 2023 Apple Worldwide Developers Conference (WWDC) on June 5.
Markets are likely to focus on ECB commentary
This is a very quiet week in terms of data and hence markets are likely to focus on last minute central bank commentary. The FOMC blackout period kicked off already on Sunday, but today we have a bunch of ECB speakers on the wires.