USDZAR has traded under a negative tone for the majority of 2020. Potential peaks have been met with heavy resistance as prices were pushed to a 9-month low.
The bottom found at the 17.26/15.10 downside Fibonacci leg, which has seen a recent bounce as momentum escalates. A strong long-term bullish divergence has propelled prices away from the $15 handle, and towards the lower border of the Ichimoku cloud.
We now await further indications of resistance at the said border, or if prices have the potential to enter the cloud. Should cloud engulfment take place, then the next targets for the currency pair would be the 23.6% and the 38.2%.
A shorter intraday outlook shows that prices are starting to decline slightly, indicating a reversal. Even though the candlesticks are trading far above the Ichimoku cloud, the base and conversion lines hang on.
This could weight prices down, as a possible hidden bearish divergence on the momentum indicator looms heavy.
The next targets for further weakness are the baseline and then the top border of the cloud, as another test at monthly lows could become apparent.