USD/ZAR 1H Chart: Patterns point to appreciation
The US Dollar has been depreciating in a channel down against the South African Rand for the last three months. Mid-December, the pair formed a new ascending channel within the bounds of which it breached a down-trend in force since December (the dashed line on the chart). Meanwhile, the rate bounced off its 2016/2017 low of 11.80 last Thursday.
These two factors together with signals from prevailing patterns suggest that the US Dollar might be due for a surge within the following weeks, setting the upper boundaries of the senior and junior channels circa 12.10 as a possible near-term target.
However, technical indicators are still in favour of another fall in the short term that could guide the pair towards the 11.70 area where the monthly and weekly S1s are located.
These two factors together with signals from prevailing patterns suggest that the US Dollar might be due for a surge within the following weeks, setting the upper boundaries of the senior and junior channels circa 12.10 as a possible near-term target.
However, technical indicators are still in favour of another fall in the short term that could guide the pair towards the 11.70 area where the monthly and weekly S1s are located.