USDZAR Outlook: 15.6645/15.6945 Remains a Valid Target if the March 2021 Gives Way-Commerzbank

After a huge surge late last week on risk aversion in the market, the USD/ZAR has cooled slightly this Monday and is down 0.66%. This comes after risk appetite improved slightly and lifted risky markets as the flight to the safety of the greenback slowed. Economists at Commerzbank are projecting a potential rise to 15/6645/15.6945, which is the next resistance above the March 2021 high.

The USD/ZAR is a pair that features a typical playbook for the carry trade and the market’s reaction to the Fed’s tapering decision. With the FOMC minutes of last week indicating that the Fed is ready to start tapering in late 2021, the greenback firmed, sending carry traders scurrying for cover. 

Despite today’s correction, the sentiment on the pair remains bullish. 

USDZAR Price Prediction

Today’s downside represents some profit-taking and a slight shift away from risky sentiment, which has led to a dip in the greenback across the board. This move jeopardizes attempts to achieve a clean break of the 15.19162 price mark. If the price closes below this level, this sets up a pullback move which could target 15.08661. However, the price must break below the 26 July/17 August highs at the 15.0000 psychological price level, attaining 14.89528 to initiate a deeper correction. In this case, 14.71708 and 14.52955 become additional targets. 

On the other hand, bulls would need to break the 15.38525 resistance to achieve a potential push towards the 15.57476 level. This price level is the 8 March high and represents a 5-month peal on the pair. A break above this level puts the USD/ZAR at new 2021 highs. The fulcrum for these moves could be a bounce on the 15.19162 price mark.

USD/ZAR: Daily Chart