USD/ZAR

USD ZAR  upside channel breakout underway.

USDZAR08062018

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.

USD/ZAR Previous

USDZAR 2 08062018

The medium term trend for the USD/ZAR currency pair remains up for the time being, as noted by the 20 day simple moving average (MA) and the price trading above the 50MA. The upward channel (parallel black lines) which has been in effect since March this year, further highlights the medium term uptrend.

In the short term we see the price whipsawing through the 20MA which is indicative of a near term price consolidation. The consolidation is further highlighted in blue with the trading range considered between levels R12.35/$ and R12.90/$.

Traders might consider the medium term trend bias when looking for short term entries into the USD/ZAR. With this in mind those trading this range would look for long entry on a pullback towards range support at R12.35/$, targeting a move back to R12.90/$. In this scenario a close below R12.15/$ would suggest the failure of the above assumptions.

Alternatively, trend followers might prefer to wait for a break above the resistance of the short term range at R12.90/$ before looking for long entry, targeting a move towards channel resistance at R13.25/$.

This information has been prepared by IG, a trading name of IG Markets 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. See full non-independent research disclaimer and quarterly summary.

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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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