Looking at USDZAR on our weekly chart we can notice that USDZAR has been failing to break to the downside as has been respecting our previously outlined levels. To elaborate further we can take note of the fact that USDZAR’s failure to break through our 17.50xxx Psychological level confirmed a new higher low on the pair after which it started rallying back up and is now trading above our 19.0xxxx price point; we can also take note of the fact that after USDZAR failed to break our 17.50xxx level creating a new higher low it gave us the opportunity to identify the formation of that bullish channel within our already existing long term bullish trend.
Now looking to the right on USDZAR we can notice the possibility of it creating a new all time high between our 20.50xxx and 21.50xxx respective levels and considering the current economic climate in South Africa and the upcoming elections causing further instability in the ZAR so we could possibly see the USDZAR head towards these levels as we head into 2024.
so why do you predict USD/ZAR declining significantly to around 16 after hitting that new high?
mosa_moshka
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@dgoldiner Based on the current market structure which is forming on USDZAR we can see that our major trend is bullish on USDZAR, now looking within the trend we can now break it down into smaller bite size pieces, so if you take a close look at USDZAR you’d notice that it has currently formed a bullish channel and we know that a bullish channel is a reversal pattern of sorts, now looking further left we can expect that after USDZAR gives us our new potential HH at around 20.xxxxx - 21.xxxxx it will start trading downwards to create our new HL within our major up trend down at 17.xxxxx - 15.xxxxx before trading upwards, now bear in mind that this is somewhat long term as we’re looking at maybe a timeframe of at least 2-3 years(+), in my next update of the USDZAR I’ll elaborate on both the Technical and Fundamental factors that could lead to this possible out come.
We also have to bear in mind that while we can speculate on both short term and long term market movement/prices we should always keep an open mind when looking at the market and not get married to a single bias as the market outlook could change at anytime.