COMMENT-Power of the cloud twist provides the rand with relief

A timely Ichimoku cloud twist may have provided the south African rand with a boost and could have triggered the beginning of retracement in USD/ZAR.

Cloud twists can appear to influence price action and USD/ZAR has gravitated towards an April 18 18.8820-18.9513 twist. The dollar hit a 19.1100 trend high on Tuesday and has fallen to 18.9250 so far on Wednesday.

USD/ZAR has already met a minimum correction level at 18.9454 - the 23.6% Fibonacci retracement is taken off the 18.4125-19.1100 Apr. 9 to Apr. 16 bull run. The next Fibonacci levels, 38.2% and 50%, are at 18.8436 and 18.7613, respectively. The 50-day moving average is at 18.90, splitting the cloud twist.

Given the rand's current vulnerability to U.S. monetary policy, geopolitical risk and uncertainty ahead of South Africa's May elections, the current pullback in USD/ZAR is likely to be limited. While the cloud twist may have influenced the bull trend, it might also provide a support point at 18.8820. It's worth noting that the Ichimoku cloud starts to rise from Thursday, possibly guiding the dollar higher once more.