- The US dollar initially fell against the South African Rand on Wednesday but has seen buyers coming back in to lift the market.
- The US dollar course had been oversold against multiple currencies around the world, but Wednesday has seen the US dollar pickup ground against the euro, the British pound, the New Zealand dollar, the Australian dollar, and of course the South African Rand.
- In other words, the oversold condition of the US dollar has finally attracted enough attention to turn the whole thing around.
Technical Set up?
Question now this point in time if it is a technical set up that we are witnessing in the USD/ZAR pair, as we are hanging around the 50 Day EMA, informing something that looks a lot like a hammer. After all, the market had shot straight up in the air just a few weeks ago and has since fallen out of the sky like a meteor. This volatility will probably continue to be a major problem, but quite frankly we have a lot of concerns around the global economy, it’s difficult to imagine why South Africa would suddenly be a place where people want to spend a lot of money. Furthermore, the United States and South Africa are on a collision course politically.
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If the market can break above the 18.80 ZAR level, it could very well go back to the 19.20 ZAR level. On the other hand, if we break down below the bottom of the candlestick for the trading session on Wednesday, then the market could go looking at the 18.38 level, where the 200 Day EMA currently sits.
All things being equal, this is a market that looks as if it is ready for a bounce, but whether or not it is a complete trend change is something that we will find out over the next couple of days in this general vicinity.
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