USDZAR – Has sentiment turned Bullish?
10th July 2017
USDZAR has been dominated by a broad downtrend since January 2016. At the extreme, the currency pair fell by more than 30%. But does last week’s strong gains signal a lasting change in investor sentiment?
This downtrend has been defined by the 21 week moving average although temporary bounces above that point for USDZAR in November, April and May could have signalled an end to selling pressure and the beginning of longer term demand. Only during the November move did USDZAR close above the average for more than one week.
Naturally, last week’s strong rise – a 5th up week from the last 6 – has yet to break that sequence so we will be looking closely for this week’s close. However, our medium term view (reflected in our Trend Table) is already assessed as bullish. This is because our USDZAR RSI signals also closed above their moving average and, importantly, the weekly Keltner channel is showing clear signs of basing.
A weekly close for USDZAR above the 21 week line (currently 13.1100) will confirm this view with sentiment then exposed to 13.7125, May’s high, then 14.1485.
