Commerzbank is predicting that the USD/ZAR could extend the slump if the pair can break below the 14.5044/14.3952 price zone. This analysis comes as the South African Rand resumes its price appreciation against the greenback, as the carry trade scenarios allow emerging market currencies to make a run against the greenback.
Commerzbank makes a note of the technical situation in which the 55-month moving average at 14.5044 remains the ceiling of the key support zone. with the 14.3952 February low forming the floor of this range. The bank predicts that a failure of this zone to continue holding would bring in 13.8765 as a potential new support target.
Other zones that could serve as barriers to any bullish action above the March 2021 high at 15.1004 are seen at 15.1916 (late February high) and 15.2343, with potentials at the January – March highs at 15.5716/15.6645. These zones are seen as potential areas for selling on rallies; a view only negated by an “unexpected rise above this high”, which now makes the 200-day moving average and the September low at 15.8204/16.0838 a viable upside target. The sentiment for the USD/ZAR from Commerzbank remains bearish.
Technical Outlook for USD/ZAR
The pair is challenging the support level at 14.54458, which is where previous lows of late December 2020 and early January 2021 lie. Below this level, the double bottom of 16/25 February 2021 comes into play (14.39768). A further breakdown of this level brings 14.28370 into the picture, with 13.97151 forming an additional support level.
On the other hand, a failed attempt at breaking down 14.54458 could allow bulls to initiate a recovery bounce, targeting 14.71708 (neckline of February 2021 double bottom), with 14.89528 also forming an additional target to the north, being the completion point of the previous double bottom. Extension of any advance beyond this point brings 15.21122 into the picture.
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USD/ZAR Daily Chart
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