Gold retreats from two-month high amid post-rally profit-taking
The rand while in a long term consolidation is giving some technical indications of short term weakness to follow.
The USD/ZAR
While the USD/ZAR rallied for the most part of 2018 (USD strength/rand weakness), the currency pair has moved in a sideways fashion over the course of 2019 thus far.
A daily chart of the USD/ZAR shows the sideways range to be between levels R13.10/$ (support) and R15.05/$ resistance. In the short term we consider another smaller price range between levels R13.75/$ and R14.60/$. The USD/ZAR price looks to have formed a price reversal (circled white) off this support level (R13.75/$). The price reversal is accompanied by the Stochastic crossing out of oversold territory.
These are bullish suggestions in technical analysis terms and in turn, further gains in the USD/ZAR are expected. R14.60/$ becomes the initial resistance target from these assumptions, while a close below R13.75/$, would consider these bullish indications to have failed.
The GBP/ZAR
While the macro catalysts for the GBP/ZAR vary to that of the USD/ZAR, the chart identifies several similarities. The GBP /ZAR remains in a broad sideways consolidation as well between levels R17.20/GBP and R19.30/GBP. The price looks to currently be reversing off a midpoint of this range at around R18.35/GBP. This price reversal is also supported by the stochastic crossing out of oversold territory.
These bullish indications suggest a rebound in the GBP/ZAR with R19.30/GBP an upside resistance target. Should the GBP/ZAR instead move to close below the R18.35/GBP support level, the short-term bullish indications would be deemed to have failed.
