US Dollar Outlook:
Despite robust US economic data, risk sentiment[1] has continued to weigh on the safe-haven[2] Dollar, fueling the demand for Emerging Market currencies which has allowed USD/ZAR[3] bears to drive prices below critical support. With inflationary concerns and declining US Treasury Yields at the forefront of the recent pullback, the release of the Michigan Consumer Sentiment[4] could potentially assist in the catalyzation of short-term price action for both the Rand and the Swiss Franc[5], providing a glimmer of hope for USD[6] bulls.
DailyFX Economic Calendar[7]
USD/ZAR Technical Analysis
For most of this year, USD[8]/ZAR has been trading within a well-defined range between the key psychological levels[9] of 14.50 and 15.00. However, as risk appetite continues to favor Emerging Market (EM) currencies[10], the volatile Rand has overcome a major hurdle by breaking below critical support, formed by the lower bound of the descending triangle[11]. Although the sustainably of the downward trajectory remains questionable, bears remain the dominant force of the immediate move as prices continue to trade below both the 50 and 200-period MA[12].
As bears strive to break below the next support level of 14.00, risk sentiment remains the primary catalyst for the short-term move. However, failure to clear the 14.00 barrier could see bulls retaliating, driving prices back towards 14.50, a former hinderance for bearish progression.
USD/ZAR Daily Chart
Chart prepared by Tammy Da Costa[13], IG
USD/CHF Technical Analysis
USD[14]/CHF[15] continues to test key Fibonacci support[16] after bulls failed to gain traction above trendline resistance, holding firm just
