USD/ZAR Humbled by Psychological Resistance at 17.700

US Dollar Rand (USD/ZAR) Price Outlook:Rand shrugs off Eskom woes and rising debt burden after 100 consecutive days of rolling blackoutsUSD faces uncertainty as geopolitical tensions riseUSD/ZAR price action faces pressure after brief retest of psychological resistance at 17.700

The South African Rand is trading near the key psychological resistance currently resting around 17.7000. With the January low holding at a level of 16.694, a rebound off 17.00 has supported USD/ZAR, pushing prices towards mid-December levels of 17.700.

As USD/ZAR approaches the 2016 high (at 17.8187), both fundamental and technical factors continue to contribute towards ascertaining a clear directional bias.

Despite the economic and political issues currently weighing on the volatile Rand, a firm layer of technical support has formed around the October low of 17.5728.

Following a solid NFP (non-farm payrolls) report last week, a move above 17.500 allowed USD/ZAR to extend gains before peaking at 17.704. However, with the consecutive four-week rally failing to gain traction above 17.700, price action eased, driving the EM (emerging market) currency back toward the 23.6% Fibonacci (of the 2022 move) level of 17.594.

For a resumption of the uptrend, USD/ZAR will need to clear 17.700 before retesting 17.7585. With the 2016 high at 17.8187, a move higher and a break of 18.00 could continue to drive prices higher.