After finding good support near the 13.875 level on April 10th, USD/ZAR reversed to the upside again and is now forming higher lows, trading above a short-term upside line drawn from the low of that day. But today, the pair met strong resistance near the 14.117 barrier, which also marks the high of April 16th. In our view, there is a good chance of seeing a continuation of the upside move, but before getting comfortable with that idea, we would need to see a clear push through the 14.117 barrier first.
A strong push through the above-mentioned 14.117 barrier would confirm a forthcoming higher high and could lead USD/ZAR above its 200 EMA, towards the 14.175 hurdle, marked by the high of April 8th. The rate might get a temporary hold up around there, or even retrace slightly lower, to test the 14.117 level, this time from above. But if the bears are not strong enough to bypass that level, this is where the bulls might step in again and drive the pair in the upwards direction, potentially breaking above the 14.175 area and traveling further towards the 14.285 zone, marked by the high of April 2nd.
Our oscillators, the RSI and the MACD, are suggesting that the above-discussed scenario has a good chance of happening. The RSI is above 50 and points to the upside. The MACD just got back into the positive territory and sits above its trigger line. In addition to that, it is also now pointing higher.
Alternatively, even if the rate slides back to the aforementioned upside line, still, not all is lost for the bulls. But if that line gets broken and the pair falls below the 13.922 obstacle, marked by the low of April 17th, then a further move lower could be possible. This is when we will examine the 13.875 area, a break of which could drag USD/ZAR to the 13.800 level, marked by the low of February 25th.
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