USD/ZAR 1H Chart: Channel Down

Source: Dukascopy Bank SA
© Dukascopy Bank SA
There is a bearish channel emerging in the one-hour chart of USD/ZAR. However, we do not expect USD to underperform any longer. The reason is a dense demand are at 14.50, where the nine-week down-trend intersects the 11-month up-trend. Additionally, the pair is strongly oversold—three fourths of positions are short. Accordingly, the pair is more likely to exit the pattern to the upside than to update the April 13 low. Once above 14.65, where we also have the weekly S1, the target should be the April 13 high at 14.80, followed by the 200-hour SMA at 14.90. Meanwhile, if the price does close under 14.50, there will be a high chance of the rate sliding down to 13 rand, namely the October 2015 low.
© Dukascopy Bank SA
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