USDZAR is under selling pressure for one more day. The pair hits fresh four-month lows amid USD weakness after the Phase One trade deal between China and USA. The central bank of South Africa in its latest policy meeting in November kept its benchmark interest rate unchanged at 6.50%. SARB pointed out that might proceed with one more rate cut of 25 basis point in the third quarter of 2020. South Africa’s GDP contracted by -0.6% in the 3Q while analyst expecting a 0.1% growth.
On the other hand Fed also kept interest rates unchanged with the dot plot forecasting that the Fed will be on hold in 2020.
USDZAR bearish momentum accelerated after the pair breached below the 200-day moving average. The pair rejected at 14.8662 (100-day moving average) on December 10th and started a correction that brought the price at fresh four-month lows.
On the downside immediate resistance for the pair will be met at 13.2654 the daily low. Next target for the bears to the downside stands at 14.1396 the low from July 19th. In case the bears break below that level then the next support zone will be met at 14.0692 the low from July 26th.
On the other hand first resistance for the pair stands at 14.4581 the daily top. A break above might attract more bids that could test the next barrier at 14.5924 the 200-day moving average. Bulls will take control above that level and the next target will be the 50-day moving average at 14.7262.