Generally speaking USDZAR remains bearish with downside targets below 6.60 but there are 2 key elements to the current price action keeping the USDZAR bulls hopes alive:
- The market has so far failed to sustain the downside range break below the former 2007 low at 6.78. A strong healthy move below a yearly low should drive strongly down and not look back. Seeing as though the market has lost some momentum on the current downside move has managed to sow the seed of doubt in the minds of USDZAR bears and we could potentially see a bounce higher this week.
- There is also what is called bearish divergence between price and some technical indicators potentially pointing towards a bounce in USDZAR
I must say that I felt that the break below 6.78 was going to cause USDZAR to drop very, very quickly but at the same time was hoping that this may be a ‘false break lower’. Note the word ‘hope’. I didn’t believe that the break would be rejected but it seems that this may be the case.
Once again 6.78 to me is the key pivot point for the week ahead again. Price needs to stay above this level to remain slightly bullish. Anything below this level skews it bearishly.
The key levels for the following week are as follows:
6.80 – Current Price
6.78 – Key pivot level (If price stays above this level this week then I expect that we could bounce aggressively)
6.71 – New 2007 low (A break below this level would put USDZAR, GBPZAR and EURZAR under severe pressure)
Please also be aware that the USD is under huge pressure once again which may weigh on USDZAR this week but if price is able to hold current levels or even rise slightly over the next week then I feel that we could see quite an aggressive bounce up in USDZAR.
Good luck for the week ahead.
Please do not hesitate to call Exchange4free for any advice or foreign exchange related queries.
08456521022
We are the experts on the ZAR and provide the cheapest way to send your money home.
- Guaranteed best exchange rates on the ZAR (we will beat any quote)
- Completely FREE money transfers with no hidden costs
- No settlement or deposit fees at your SA bank (which can be up to R500)
www.exchange4free.co.uk
