Rand looking better but not in the clear
Nov 25 (Reuters) -The dollar has relaxed its grip on the broader market and this is allowing the South African rand to stage a modest recovery but despite an improving fundamental backdrop USD/ZAR still threatens to push higher.
USD/ZAR pulls away from last week's 18.1825 high and cancels out Friday's 18.0225-8.1400 bull session. The market is holding tighter levels close to the middle of a 17.9325-18.3100 range, in place since Nov. 15.
Technically, a daily bullish continuation pattern is playing out, which could push USD/ZAR clear above the 200-day moving average resistance, currently at 18.2532. The pattern has a break-out point at 18.1365 today. In the rand's defence, the pattern is beginning to look stale and could be negated this week.
On the daily Ichimoku chart there is a below market cloud twist fighting the ZAR's corner. The twist out to Nov. 29 has 17.5644-88 parameters and could drag on the dollar.
Fundamentally, the South African domestic scene and interest rate differentials continue to throw the rand a lifeline and could slow any further depreciation.
On balance, the rand remains at risk to external drivers and will need to push home its small Monday advantage to strengthen its technical outlook.
For more click on FXBUZ
USD/ZAR daily candle chart: https://tmsnrt.rs/3V6qDWq
Peter Stoneham is a Reuters market analyst. The views expressed are his own, editing by Ed Osmond
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