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The medium term trend for the USD/ZAR currency pair remains up for the time being, as noted by the 20 day simple moving average (MA) and the price trading above the 50MA. The upward channel (parallel black lines) which has been in effect since March this year, further highlights the medium term uptrend.
In the short term we see the price whipsawing through the 20MA which is indicative of a near term price consolidation. The consolidation is further highlighted in blue with the trading range considered between levels R12.35/$ and R12.90/$.
Traders might consider the medium term trend bias when looking for short term entries into the USD/ZAR. With this in mind those trading this range would look for long entry on a pullback towards range support at R12.35/$, targeting a move back to R12.90/$. In this scenario a close below R12.15/$ would suggest the failure of the above assumptions.
Alternatively, trend followers might prefer to wait for a break above the resistance of the short term range at R12.90/$ before looking for long entry, targeting a move towards channel resistance at R13.25/$.
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