ZAR ANALYSIS
The Rand has remained robust against its major currency counterparts in 2021 as optimism around a global economic recovery favored Emerging Market (EM) currencies. Local economic woes have yet to be exposed by means of the Rand with external factors safe guarding underlying fundamental weaknesses.
The long-term technical and fundamental picture suggests a short Rand bias which may bring an end to the ZAR’s recent bull run.
TECHNICAL ANALYSIS
Chart prepared by Warren Venketas[2], IG
USD/ZAR[3] has been wading through the now well established rectangle pattern[4] (yellow). Price action[5] shows a push off rectangle support (61.8% Fibonacci level) and may be turning upward toward resistance (50% Fibonacci level) – Fibonacci retracement taken from 2018 low to 2020 high.
Discover the basic building blocks of Fibonacci and how it can be applied in Financial markets![6]
Chart prepared by Warren Venketas[8], IG
The daily USD/ZAR chart above shows Rand bulls failing to hold prices below the 14.5000 psychological level[9] with a long lower wick last week Thursday. Since then, 14.5000 has been maintained as short-term support with diagonal resistance (black) being tested today. A break above diagonal resistance may spur further upside toward the March 26 swing high at 15.1014. A consolidation around 14.5000 may ensue which may give USD/ZAR bulls a look at a more favorable entry should prices near support once more.
Support levels:
- 14.5000
- 14.3967
Resistance levels:
- 14.6132
- Diagonal resistance
- 15.1014
Chart prepared by Warren Venketas[11], IG
The Rand has been extremely strong against the Euro through 2021 with several lockdowns and fears of a
