The South African Rand has been weakening steadily versus the US Dollar the past several months, almost a year now. The USD/ZAR's longer-term appreciation has been stunted over the past two weeks, as efforts by emerging market central banks have prevented a currency crisis from emerging. Concerns had developed that the end of the Federal Reserve's QE3 would provoke continuous capital outflows from emerging markets as "hot money" flows reversed.
The tides of concern over emerging markets have pulled back, and USD/ZAR has traded lower in a very orderly descending channel. On both charts below this is marked by a descending trendline shaded green. This is characterized as orderly due to the fact that there have been no moves greater than two consecutive days since the 2014 high was set on
The Slow Stochastic indicator on the USD/ZAR daily chart offers necessary perspective. Consider that price has just reached the
Now, the indicator has 'digested' its overbought reading as it enters the familiar support zone. Price action in recent weeks may merely be just a more assertive, corrective pause before the longer-term rally continues.
The 4 hour timeframe for USD/ZAR drills down to a low enough timeframe to clearly outline the support zone and its significant points of price interest in the chart above. Specifically the top of the support zone at
USD/ZAR could be ready for its next round of appreciation if price steadies at its current levels. Although the Slow Stochastic indicator has already offered a "buy" signal, confirmation that the downtrend from the
In that case, USD/ZAR saw a fair deal of intraday and intraweek selling during the recent decline near
This would be an uptrend in the short-term worth exploring in more detail, as USD/ZAR remains among longer-term trend support. On both charts, the blue solid then blue dotted line represents the trend from the October and