Technical Analysis – USDZAR rebound stalls, but picture still positive

Marios Hadjikyriacos, XM Investment Research Desk

USDZAR touched a one-year high in mid-August, before retreating somewhat. Still, the pair remains in a medium-term uptrend, characterized by higher highs and higher lows, something also supported by the steepening 50-day simple moving average (SMA).

Short-term oscillators, however, paint an entirely neutral picture. The RSI is flat near its neutral 50 zone, while the MACD is slightly above its red trigger line but near its zero level.

If buyers remain in charge, they must first overcome the 15.07 area, defined by the inside swing low on August 23. A clear push above that zone would open the way for 15.50, where another break would reaffirm the positive picture, and turn the focus to 15.97.

On the downside, should the bears manage to pierce below 14.50, that would turn the bias back to a more neutral one. In that case, their next obstacle may be the 200-day SMA at 14.35, before the July low of 13.82 comes into view. A successful break below that level too would confirm that the outlook is firmly neutral.

Summarizing, the landscape is still positive, and a move below 13.82 is needed to definitively change that. Otherwise, a push above 15.50 could give the bulls more fuel.