Looking at the technical picture of USD/ZAR on a 4-hour chart, we can see that this week, the pair broke its short-term upside support line drawn from the low of March 5th. The rate then slid all the way to the 17.844 hurdle and found support there, this way testing the 100 EMA as well. For now, we will take a cautiously-bearish approach, but in order to get more comfortable with lower levels, a break of that 17.844 obstacle would be needed.
A drop below the aforementioned 17.844 zone could attract more sellers into the arena, as such a move would confirm a forthcoming lower low and USD/ZAR might get pushed to the 17.665 area, marked by the low of March 31st. Initially, the rate could stall around there, or it may rebound slightly. That said, if the pair remains below the 17.844 barrier, this might result in another slide. If the 17.665 hurdle breaks this time, this would confirm another lower low and this may clear the path to the low of March 25th, at around 17.168. That level also coincides with the 200 EMA, which could provide additional support.
The RSI and the MACD on our 4-hour chart are slightly in support of the above-mentioned scenario. The RSI is below 50, but remains flat for now. The MACD is also somewhat on the flat side, while sitting below zero and coinciding with its trigger line.
On the upside, if USD/ZAR moves back above the high of April 8th, this may attract a few more buyers and allow them to lift the rate to the 18.738 hurdle, which is high of April 7th. If the buying doesn’t stop there, a further push north may send the pair to the 18.962 level, marked by an intraday swing low of April 3rd.
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