USD/ZAR Price Analysis: USD dives to 1-1/2 week lows against South African Rand

The USD/ZAR pair remained under some heavy selling pressure for the second straight session on Tuesday and dropped to 1-1/2-week lows, around the 18.60-55 region in the last hour.

The pair failed to capitalize on last week's bullish daily/weekly close above the 19.00 round-figure mark and witnessed a dramatic turnaround from the vicinity of record highs set earlier this month.

The latest optimism over the easing of coronavirus-related lockdown and a push to accelerate the gradual re-opening of the economies prompted some aggressive US dollar long-unwinding trade.

This comes after South Africa's President Cyril Ramaphosa announced a phased easing of five-week lockdown restrictions from May 1, which provided an additional boost to the SA rand.

The downfall seemed rather unaffected by the fact that the country is relying on the International Monetary Fund, World Bank and New Development Bank to finance the economic stimulus package.

President Ramaphosa last week unveiled R500 billion stimulus package to support the economy amid the coronavirus pandemic. On Friday, Finance Minister Tito Mboweni amended the combined fiscal and monetary package to over R800 billion.

Hence, it will be prudent to wait for some strong follow-through selling before confirming that the pair might have topped out in the near-term and positioning for any further depreciating move.

Later during the early North-American session, the release of the Conference Board's US Consumer Confidence Index might influence the USD price dynamics and provide some trading impetus.

Technical levels to watch