Could 2024 be coming with Rand strength against the US Dollar?
In April 2022, major institutions sold the Rand off when it was trading around R14.40 ~ R14.80 against the US Dollar. Price proceeded to print a steep rising channel capping off close to R19.92 with a shooting star and a beautiful bearish engulfing candle that closed the first week of June 2023 below R18.70. This was an indication that Rand buyers that were sitting around the R19.30 level in April 2020 were still awake.
Looking at price action after June 2023, we can see a change of character in price by way of printing a lower low and lower high, signalling potential further strengthening of the Rand against the US Dollar. This will be confirmed once the USDZAR pair starts trading below R18.00 in the coming year as we traded bearishly throughout December 2023 and closed the year below the 50 Week EMA.
Once the rate drops below R17.40, we could see the short term downward target of R16.20 being reached, with the medium to long term target sitting at R14.80 to rebalance the market after the institutional demand of the USDZAR in April 2022.
If however, R18.00 remains strong support, we could see one last push by the US Dollar Bulls above the 50 Week EMA to levels beyong R19.70 potentially pushing the exchange rate to R21.00.
Current sentiments: Bearish on the USDZAR with neutrality taking over if we trade above R18.80 in the first half of 2024, and bearish sentiments will be completely off the table once the pair trades and holds well above R19.70 as the probability of reaching R21.00 will be in play.
Looking at price action after June 2023, we can see a change of character in price by way of printing a lower low and lower high, signalling potential further strengthening of the Rand against the US Dollar. This will be confirmed once the USDZAR pair starts trading below R18.00 in the coming year as we traded bearishly throughout December 2023 and closed the year below the 50 Week EMA.
Once the rate drops below R17.40, we could see the short term downward target of R16.20 being reached, with the medium to long term target sitting at R14.80 to rebalance the market after the institutional demand of the USDZAR in April 2022.
If however, R18.00 remains strong support, we could see one last push by the US Dollar Bulls above the 50 Week EMA to levels beyong R19.70 potentially pushing the exchange rate to R21.00.
Current sentiments: Bearish on the USDZAR with neutrality taking over if we trade above R18.80 in the first half of 2024, and bearish sentiments will be completely off the table once the pair trades and holds well above R19.70 as the probability of reaching R21.00 will be in play.
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