USD/ZAR 4H Chart: Channel Down

For a prolonged period of time USD/ZAR was bullish, but it topped out near 11.40 late January and then came under strong selling pressure. As a result, there is a potentially high-quality bearish channel emerging on the four-hour chart.

This implies the U.S. Dollar will be capped at 10.44, where the weekly R1 merges with the down-trend resistance line. Additional supply area is at 10.47, where the May 20 high is reinforced by the 200-period SMA. It is also expected that USD/ZAR will move south, en route to 10.19 (down-trend and weekly S2), but will have to breach 10.27 (May 13 low and weekly S1) in order to reach the edge of the pattern.