Further weakness likely for USD/ZAR

A few weeks back we noted a downside breakout on the USD/ZAR chart, with a failure considered as a move back above the middle of the identified trading range.

The aforementioned breakout proceeded to fail but has now rallied to breakout once again, this time above the upper resistance level.

The upside breakout carries a higher degree of merit as it is in line with the long-term trend of the rand’s weakening against the dollar. The price has pulled back to retest the breakout area before now making an attempt at its projected target which we predict to be R10.80/$.

The target is derived by taking the height of the sideways range and projecting a proportionate distance from the breakout area.

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