USD/ZAR 1H Chart: Channel Down

There is a small version of the channel down pattern currently emerging on the hourly chart of USD/ZAR. However, despite its size (merely 30 bars) the trend-lines forming it have already proved to be topical on several occasions.

Consequently, we may expect the U.S. Dollar to respect the resistance at 10.5336 and subsequently go down while targeting the falling trend-line at 10.4554, where the demand area is reinforced by the daily S2. At the same time the SWFX market sentiment is moderately bearish (59% of positions are short) and most of the technical indicators on the nearest time-frames are also pointing south.