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MENAFN- Daily Forex)
- In my daily analysis of exotic currency pairs, it's worth noting that the US dollar initially fell against the South African Rand, only to find a ton of support underneath to keep the market somewhat afloat.
- Because of this, the market is likely to continue seeing a lot of buying on the dips, just as we had seen early during the trading session on Wednesday.
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All things being equal, this is a market that I think given enough time will continue to go much higher, because quite frankly interest rates in the United States continue to rally, while there are a lot of concerns around the world. Because of this, emerging market currency such as the South African Rand will continue to suffer, and therefore I think you are in the midst of seeing a major trend change. Quite frankly, when you see a huge shot higher like we have over the last couple of days, it's very rare to see the market turn right back around and fall apart. Typically, when things like this happen, they end up meaning something Analysis
The technical analysis for the USD/ZAR exchange pair is changing quite rapidly, as the market dipped below the 200 Day EMA during the early hours of Wednesday, and even broke below the 18 ZAR level initially, before turning right back around to show signs of life.
EURUSD Chart by TradingView
By doing so, the market ends up showing quite a bit of resiliency, and therefore I think you've got a situation where it's very likely that we will see this pair go higher over the longer term. All things being equal, this is a market that I think could go looking to the 18.50 ZAR level, possibly even higher than that.
If we were to turn around and take out the bottom of the candlestick for the trading session on Tuesday, then I think you get a deeper correction but at this point in time it certainly looks as if the US dollar will continue to be very bullish.
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