The Rand Report

USD/ZAR testing the short term breakout level

In our last USD/ZAR report it was noted that the first upside target of R13.20/$ had been realised and we looked at a break above R13.20 calling for the next upside target (wedge resistance) at R13.65/$. 

The USD/ZAR made a good attempt to our ultimate wedge target of R13.65/$ falling just 2c short thereof before forming a bearish engulfing candle pattern (circled red). This marks the end of the move and our falling wedge chart pattern in terms of relevance going forward. 

Currently, we focus on the short term price consolidation for the rand between levels R12.85/$ and R13.10/$. The price is currently testing the resistance of this short term range at R13.10/$. Should the USD/ZAR price close above this level we consider an upside breakout. In this scenario R13.40/$ becomes the initial upside target, while breakout traders might consider using a close below the intraday low at R12.97 as the failure level. 

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This information has been prepared by IG, a trading name of IG Markets Limited and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. International accounts are offered by IG Markets Limited in the UK (FCA Number 195355), a juristic representative of IG Markets South Africa Limited (FSP No 41393). South African residents are required to obtain the necessary tax clearance certificates in line with their foreign investment allowance and may not use credit or debit cards to fund their international account.

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