The rand report

USD/ZAR short term pullback could be longer term opportunity.

I our last report we noted:

  • Bullish USD/ZAR view was maintained
  • The short term high at R13.77/$ was the initial target favoured
  • R13.98/$ provided a further upside target
  • A pullback towards the R13.42/$ was still considered a viable long entry opportunity for traders not already committed to the long side
  • A close below trend line support ($13.30 at the time of writing) considered the failure of the bullish setup

Since our last report, the USD/ZAR currency pair has managed to trade through the R13.77/$ mark to reach a high of R13.86/$, not yet reaching the further upside target of R13.98/$. Circled blue we see a bearish engulfing candle pattern which has marked a short term top before the first real pullback from overbought territory had started. The current pullback could be providing the new opportunity for long entry. We await a new bullish price reversal from between current levels and the R13.30/$ mark.  Should this occur, the short term high at R13.86/$ becomes the new initial upside target favoured, followed by the original resistance target of R13.98/$. In this scenario a close below the reversal low would be used as the failure level. Should the currency price move close below the R13.30/$ mark before a bullish reversal occurs, the long entry idea would need to be reassessed as the uptrend may have lost significant momentum. 

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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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