USDZAR, Daily
The drift down in the USDZAR continues and the rejection of last Wednesday’s (October 31) high looks to have proved key. The Greenback saw a clear bid into month end across many crosses and it was clearly demonstrated here with the South African Rand (one of the key emerging market currencies). The move from the low on October 24 to the 31 October high and the rejection of this key level (14.8565) have now all been reversed.
The significant move on November 1, with the breach of the 20-day simple moving average and engulfing the previous 5 sessions, has since accelerated. Today, the pair has breached the key 14.0000 level and broken out of the floor of the 15.0000-14.0000 range to post a 4 month low and triple bottom.
The move lower and breach of the trading triangle suggests a possible move to 13.2000. However, the new triple bottom formed today (traditionally a bullish formation) also represents the key 61.8 Fibonacci level of the August move from 13.1140 to 15.6735 and current S2 support. Next support lies at S3, 13.8475 and 13.7000, the weekly support and the daily 200-day moving average. A breach back over the 20-day moving average and R3 level at 14.4120 is required to reverse the move down.
Stuart Cowell
Head Market Analyst
HotForex
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