ZAR on Fire!

Technically, the ZAR is at a very important support level, with a break and close below its 50-day Exponential Moving Average (EMA) & Descending Triangle (at R17.92/USD), could see the ZAR only seeking support at its 200-day EMA (at R16.10). We also saw a nice little break of the 8-day EMA below the 21-day, which is definitely looking interesting over the shorter-term.

The 14-day RSI is still not oversold, so possibly still some legs. We can clearly see that the recent Momentum in the USDZAR is still very much in favour for the ZAR.

Just remember that a possible (expected) Repo Rate cut by the SA Reserve Bank (SARB) today, could bring some short-term weakness to the ZAR. Should we see strong weakness, level to watch is the 21-day EMA (R18.37), which also coincide with the top resistance of the Triangle. A break and close above these resistance levels, could very much bring the R19/USD into play.

My recommendation is to wait for the SARB announcement today. Should we not see any weakness and even a possibly break below R17.90, I would be a lot more optimistic on a proper ZAR recovery going forward.