The US dollar has initially fallen during the trading session on Friday again against the South African Rand, reaching towards the 14.50 Rand level before turning around and rally in a bit. That being said, it was a relatively small range due to the fact that it was Good Friday and of course most traders were away from their desks.
Adding to the noise is the fact that it was Non-Farm Payroll Friday in the United States, so it certainly did not help the situation either. Ultimately, the market has seen the 14.50 Rand level tested multiple times, and it does seem to be a major area that people are trying to defend. This is where the market had shot straight up in the air previously, so I think is going to take quite a bit of effort to break it apart to the downside. If we do break down below the 14.50 Rand level, the market is likely to go looking towards the 14 Rand level.
To the upside, the 15 level is also an area that should be paid close attention to as the 50 day EMA is sitting right there, and of course it is an area where we have seen both support and resistance, so it does make quite a bit of sense that we would see noise there as well. One thing is for sure, we have to make a bigger decision soon, and therefore we could see a rather big move. The South African Rand does offer a positive carry, and therefore it does make sense that if things continue to be somewhat stable, this pair will probably drift lower. However, we have recently seen yields in America rally again, and as those yields get stronger, it is possible that the US dollar could get a bit of recovery. Furthermore, if we get some type of scare in the financial markets that could send the US dollar higher as well. The 200 day EMA is currently at the 15.51 Rand level, so if we were to break above there then I think the trend would change and we would go much higher. In the short term, it looks like we are moving between 0.5 Rand levels, and therefore if you are a shorter time frame trader it could be a potential set up for range bound trades.
