(MENAFN- Daily Forex)

• I've been watching this pair for a little while now, because we are in the process of trying to break down below a significant amount of support.
• We initially did try to rally during the trading session to break above the 17.50 ZAR level but then gave back the gains to show signs of exhaustion.
• The selling that we had during the trading session was rather intense and ended up forming a bit of an inverted hammer.

Technical Analysis

The technical analysis for this pair is obviously very negative, and now that we have broken down below the 17.50 ZAR level, it looks like the bottom could start to fall apart. The rally at this point in time that we saw during the day has shown just how pointless going long is at the moment, and therefore it's likely that we could go looking at the 17.25 ZAR level, possibly even the 17 ZAR level after that.

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On the other hand, if we were to break to the upside, breaking above the 17.60 ZAR level would be rather bullish, but it's really not until we break above the 17.80 ZAR level that things get bullish from a longer-term standpoint, almost certainly having the US dollar looking to the 18 ZAR level.

EURUSD Chart by TradingView

Ultimately, this is a market that sees the South African Rand offering more in the way of interest, and of course there are a lot of concerns out there about the US dollar itself, as the US economy is slowing down. The question of course will be whether or not we can continue this way, because if the global economy starts to fall apart, it's difficult to imagine a scenario where South Africa is where everybody is going to be running too, but as things stand at the moment, it certainly looks like more selling pressure is probably in the cards for this pair.

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