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Traders who were looking to a pullback for long entry into the USD/ZAR currency pair, would have missed out on the sharp USD/ZAR run we have seen, although those looking for entry on the upside breakout (of the R12.90/$ level) would be reaping the benefits thereof right now. Whichever approach chosen, keeping the long bias consideration would have served traders well, if not by reward, then by protecting them against being on the wrong side of the price move currently underway. The gains in the USD/ZAR this week have been twofold, while weaker than expected South African GDP has been a domestic catalyst for weakness in the rand, the nearing of further rate hikes (expected next week) in the US have seen continued strength in the dollar.
The price has now traded well through the 200 day simple moving average (200MA labelled blue), and the short medium and long term trends are all considered up for the USD/ZAR currency pair. The price is now also trading through channel resistance. The next horizontal price resistance target is considered at R13.65/$. Traders not already commited to the upside, might hope for a pullback from overbought territory towards the R12.77/$ to R12.90 region for long entry. We would only start to consider a change in the current directional trend should the USD/ZAR revert to trading below the R12.55/$ mark.
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