The USD/ZAR pair is wavering today after it rose by more than 2% yesterday. The pair is trading at 15.0167, which is 3.50% above last week’s low of 14.4960.
What happened: The South African rand has been in a strong upward trend in the past few months. It rose by more than 10% from its lowest level last year as the risk-off approach dominated the market.
Yesterday, the USD/ZAR pair rose sharply as investors continued to react to the rising number of coronavirus cases in the country. This new wave is happening due to a faster-spreading variant of the virus.
At the same time, the government is struggling to procure vaccines. While Pfizer and BioNTech have offered a discounted price of their vaccine, the country said that the price is still exorbitant.
The USDZAR is also rising because of the general fear about South Africa’s fiscal situation due to the rising debt.
South African rand technical outlook
The four-hour chart shows that the USD/ZAR formed a double bottom at the 15.5132 level last week. This pattern is usually a signal that bulls are coming in. The pair also moved above the 15-day and 25-day exponential moving averages. Notably, it is forming a bullish pennant pattern.
Therefore, I suspect that the pair will continue rising as bulls aim for the next resistance at 15.20. However, a drop below the support at 14.90 will invalidate this price action.
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USD/ZAR technical chart
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