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Home Technical Analysis

USD Has Potential for Big Rally This Quarter vs Rand

Forex Tips by Forex Tips
October 15, 2020
in Technical Analysis
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USD/ZAR Highlights:

  • USD/ZAR choppy trading could continue for now
  • Descending wedge forming could send it higher later on
  • 20 or better may be in the works as bull market continues

USD/ZAR has not been a particularly easy read for some time now, and that may continue to be the case in the near-term. But overall, the choppy indecisive price action with price falling prices within the context of a broader uptrend could turn into a positive development for the long-term.

The decline since the coronavirus panic could set USD/ZAR up for a rally to commence at some point in Q4 that may eventually take price back to record highs. Patience, however, is likely required before choppy price action can give way to a sustained advance.

We may see further weakness to sub-16, which means a new low under the September bottom before seeing buyers step in a again. The fact, though, that buyers do keep stepping in on weakness is a good sign overall.

The wedge may not tighten up towards an apex until sometime in November, possibly even December before breaking above the top-side trend-line running off the April peak. In the event it does, a run to new highs into the 20s looks possible.

For short-term traders, taking a mean-reversion approach to trading may be most suitable – that is, fading rallies and sell-offs that run out of momentum. But traders will want to beware of continuing this tactic for too long as price works towards an apex and breakout risk grows.

USD Forecast

USD Forecast

Recommended by Paul Robinson

Check out the Q4 USD Forecast

USD/ZAR Daily Chart (choppy price action could lead to apex)

USD/ZAR daily chart

USD/ZAR Weekly Chart (trend is higher, could reassert soon)

USD/ZAR weekly chart

USD/ZAR Charts by TradingView

Resources for Forex Traders

Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

—Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at@PaulRobinsonFX





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