TALKING TECHNICALS: Choppy seas are possible for the rand
The rand is on the back foot, and the nine-year-old bull market may be nearing its end
The rand/dollar exchange rate has formed a saucer-bottom pattern over the course of 2018 so far. In April the currency broke above a key technical level at R12.10. That level marked a number of highs from February through to April. The break above R12.10 opened a near-term target of R12.60 that was met within two weeks of the breakout. A strengthening US dollar during April was largely responsible for the weakness in the rand over that time. In May, the currency pulled back towards the technical breakout area at R12.10. That R12.10 level presents a fairly important dollar support level at the time of writing.
The 50-day moving average also comes in at R12.05 to offer further dollar support. The R12.00-R12.10 area is likely to prove sticky into any further rand strength soon. If a reversal off that area were to occur, it’s possible that the rand may move a bit weaker and trade in a choppy range between R12.00 and R12.50 for the near term. Only a convincing and sustained move be...
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