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U.S. Dollar / South African Rand

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USDZAR trade ideas

Rand re-check The weaker than expected US CPI results sparked a prompt risk-on rally which sent the dollar and US bond yields tumbling. The rand caught a strong bid off the back of this boosted risk-on sentiment which allowed the rand to pull the pair all the way onto the blue support line at 18.13. The critical rate to keep an eye out for now is the black 61.8% Fibo retracement rate at 18.27. A failed break back above this level will allow the rand to pull the pair lower onto the blue 61.8% Fibo retracement rate of 17.94, which coincides with the long-term trend line. A break back above 18.27 will however allow the pair to inch back up towards the 200-day MA at 18.60. The fundamental factors behind the rand’s gains is purely due to a change in investor sentiment following the dovish Fed interest rate decision a few weeks ago and the narrative that inflation is peaking. As long as the market remains confident that the Fed will be able to pull off their “soft landing,” the more interest the rand will get from the carry trade. Other fundamental factors that could support the rand are quite thin particularly commodity prices that have remained range bound. Next week the SARB is expected to hold the repo rate at 8.25% and it’ll be interesting to see how the markets react once the waters across the Atlantic has settled. In terms of technical indicators, there is a degree of divergence on the RSI which could be an early signal of a move higher towards 18.50-18.60 before the rand is allowed to test the support rate at 17.94. The 50-day MA is also rolling over which can create a death cross if it crosses below the 200-day MA. This will be a bullish indicator for the rand since the last time the 50-day MA crossed below the 200-day was in April 2022 and October 2020. For now, I’m sitting on the fence with this pair as I believe the risk-on rally may have been overdone following the US CPI print. I’m watching the DXY and the US 10-year yield to judge whether the rand’s rally can continue. A turn in the DXY and US yields will pin the rand back onto the ropes if we don’t see a significant rally in commodity prices.
by Goose96
USDZAR (W1) Strong BuyHey traders, this is Rogue_Trader007. USDZAR has been my top entry since July and sorry I'm sharing this late. Strong support level at 0.786 Fib level, which is also a hidden Divergence when combined with 14 period RSI. There's also a Bullish Engulfment candle stick pattern right on the .786 fib level which indicates a STRONG reversal. This makes a great entry as it usually shoot towards the 1.272 Fib level. Making this a strong BUY. Downside: Long Term position. You might hold for a few months. ALL THE BEST!!!
Long
by Rogue_Trader007
USDZAR pre-SARBThe rand has been volatile recently due to the swings in the global interest rate expectations. The SARB will most likely act in lock step with the Fed this week which will see the SARB keep the SA repo rate at 8.25%. The rand will be at the mercy of global investor sentiment regardless of how hawkish the SARB will be, but a hawkish tone is expected to support the rand. The 4H time frame is suggestive of a lack of upside momentum for the pair which could allow the rand to pull the pair into the support range between the 200-day MA at 18.59 and 18.43. A failed break below this range will leave the rand facing an intimidating uptrend as we head into the closing stages of the year. The daily RSI is suggestive of room for further upside movement for the pair and a break above the 50-day MA at 18.90 and a re-test of the red resistance range around 19.12 is my projected move for the rand. A break below 18.43 will however allow the rand to pull the pair back towards 18.12 which will invalidate this idea.
by Goose96
USDZAR tentative Inverse H&SHere price action is showing a higher low and creating an Inverse Head & Shoulder pattern. The down trendline is plotted on the H4 timeframe and still indicates a downtrend. However, we can see that there is enough room for the iH&S pattern target projection to be reached. The up trendline connecting the head and right shoulder creates a triangle pattern so I will consider all possible moves the price can make, read the candlesticks around area of importance, and look for momentum increase before price intersect lines to help me anticipate price direction. I use candlesticks to gauge bearish/bullish momentum.
Long
by ForexCollege