South African Rand Outlook: USD/ZAR Timid Following Ratings Warning

This zone restriction has created a rectangle pattern (blue) that suggests an impending breakout. Because the preceding trend is to the downside, this could lead to a bearish breakout should prices break below support (14.5030).

Trendline resistance (dashed black line) has held since April 2020 highs which allows for further upside before this key area of confluence is tested. A break above this could coincide with a topside breakout of the rectangle formation which may lead to a bullish break and trend reversal.

The Relative Strength Index (RSI) remains toward the bearish bias as it sits below the mid-point (50) however, a recent upward swing indicates a slowing in bearish momentum.

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