South African Rand eases from record high within longer-term bullish channel

Share:

• USD/ZAR retreats from all-time high to pare the biggest daily gains in a year amid overbought RSI.
• 18-month-old rising trend channel keeps South African Rand sellers hopeful.
• Previous resistance from March restricts immediate downside ahead of 10-DMA.

USD/ZAR takes offers to refresh intraday low as it steps back from the all-time high marked the previous day. In doing so, the South African Rand (ZAR) pair drops 0.25% intraday to 19.75 heading into Friday’s European session.

That said, the USD/ZAR pair marked the biggest daily gains in a year the previous day as it crossed an upward-sloping resistance line from March, now immediate support near 19.70. However, the overbought RSI (14) allowed South African Rand traders to lick their wounds within a 1.5-year-old rising trend channel bullish formation.

Hence, a two-month-old resistance-turned-support line, around 19.70 restricts the immediate downside of the USD/ZAR pair ahead of highlighting the tops marked earlier in the month around 19.52 and 19.51.

In a case where the South African Rand recovers beyond 19.51, the 10-DMA and an upward-sloping trend line from October 2022, close to 19.33 and 18.80 in that order, could challenge the pair sellers.

On the flip side, the 20.00 psychological magnet lures the USD/ZAR buyers ahead of the stated channel’s top line surrounding 20.12.

Overall, the South African Rand remains on the bear’s radar despite the latest pullback.

USD/ZAR: Daily chart

Trend: Pullback expected