USD/ZAR trades below the downtrend line, outlook still negative.
USD/ZAR continues to trade in a downward pattern, with the price structure consisting of lower highs and lower lows below a downtrend line drawn from the September highs. Moreover, the 50-day simple moving averages (SMA) looks ready to cross below the 200-day one, which would mark a so-called ‘death cross’ – a bearish sign.
Momentum oscillators also paint a cautiously negative picture, with the RSI looking ready to cross back below its neutral 50 level, while the MACD may also test its red trigger line soon.
Further declines in the market could encounter support near the January lows at 13.22, with even steeper declines aiming for 13.07, the July 2018 trough. If the bears break below that hurdle too, the next obstacle may be the 12.90 area, marked by the peak of May 2018.
On the upside, resistance to advances may come near the crossroads of the aforementioned downtrend line and the 14.20 zone. A bullish violation could set the stage for a test of 14.37, the peak of February 20. Another break above that area would mark a higher high on the daily chart, turning the outlook to a more neutral one.
Summing up, the picture remains negative, with a decisive break above 14.37 required to bring that into question.
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