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The USD/ZAR has traded back to support of the trading range which has been in place since August 2015. Strength in the Rand has gained traction since South Africa managed to avert a ratings downgrade in December 2016. Dollar weakness has furthered the cause for the rand, most significantly since the inauguration of new U.S. president, Donald Trump and his policy rhetoric’s which have followed.
However at current levels the USD/ZAR is starting to look oversold suggesting that a short term rebound on the currency pair may be nearing (i.e. Dollar strength / Rand weakness). The oversold signal at current support is considered short term bullish indication for the USD/ZAR pair and a move back to R14.05/$ is considered. Aggressive traders might consider the current pricing a long entry opportunity, targeting a move back to R13.40/$ and R14.05/$ respectively, using a close below R13.00/$ as a failure level. More conservative range traders might wait for a bullish price reversal to confirm with a close above R13.40 signalling the long entry opportunity. In this scenario a close below R13.20/$ or R13.00/$ might be used depending on the traders risk threshold.