USDZAR, H4 & Daily
USDZAR has been moving sideways the past 2 days, within the range between the 50- and 200-day exponential moving average, at 13.80-13.89. The pair looks to be quite well supported quite well by the 200-day EMA in the short term, as this level also represents that the pair is managing to hold more than 50% of the gains seen since the strong rebound on the 13.23 on February 1.
The overall picture of the asset remains neutral to negative after the drift from its 14.36 high, with the price close to Friday’s lows, and the bearish cross formation yesterday between the 50- and 200-day SMA, strengthening the negative bias in the market. Additionally in the bigger picture, the pair has been held in a downside channel since September, by forming lower lows and lower highs.
In contrast with all the above, momentum indicators in a daily basis are positively configured, as both RSI and MACD hold above neutral zone. Meanwhile the break of the pennant formation on February 26 is another positive sign for the asset, which adds doubts for the continuation of the down move.
In the near term, the market is likely to continue moving sideways as the 200-period EMA in the 4-hour chart and daily chart keep flattening. Regarding the technical indicators intraday, the RSI is sloping gradually higher but still below 50, while the MACD is flattening so far in the negative area. Both are confirming the neutral structure in the price action.
In the case that the pair extend northwards above the upper edge of 2-day range, at 13.89, then this level could provide support before the price moves further higher at the 14.06 barrier, taken from the highs on January, and past Thursday’s and Friday’s high as well. A higher pace could invite more bulls into the market, likely sending the price towards 14.20-14.36.
Oppositely, as the bearish momentum still holds despite the Support found at 13.80 the past 3 days, a slip below this level could lead the price to the 61.8% Fib. level from February’s rally, at 13.67. Further losses below this level could draw attention to the 6-month Support, at 13.10-13.20.
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Andria Pichidi
Market Analyst
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