USD/ZAR hinders near 13.05

The downward pressure that prevailed the market since early August bounded USD/ZAR in a descending channel, thus falling down to the 12.76 mark one month later. After failing to penetrate this level once again two session later, the US Dollar broke out of the channel and consequently formed an ascending wedge.

The pair is currently testing the 38.2% Fibo at 13.04. Given various failed attempts, this level is not expected to surrender under the pressure unless some major jumps are to occur.

Thus, the daily outlook for the pair is bearish, setting the 23.6% Fibo and the 200-hour SMAs at 12.92 as a probable short-term target. This move should breach the bottom wedge boundary and consequently result in a price decline.

Trade closed: stop reached:

The previous forecast was wrong due to ignoring the larger scale situation.

Comment:

Here is the promised update.

On a large scale the US Dollar is trading against the South African Rand in a symmetrical triangle pattern. Meanwhile, the pair has made a recent rebound against the support line of the triangle and formed a channel up pattern, which seems to be nearing its end.

The ascending channel has reached a resistance cluster located from the 13.35 to 13.40 levels. The cluster consists of the weekly and monthly R1s, which are hindering the pair’s ascent.

However, the pair is highly likely to rebound, as soon as the upper trend line of the triangle pattern descents, as on September 19 it was located at the 13.40 mark.

Comment:

The strange thing is that one of our Analysts already forecasted the moves a month ago. The review and ignoring of larger scale picture occurred later on.