The US dollar is starting to turn lower against the South African rand after the currency pair recently rallied to its highest trading level in more than a decade.
USD/ZAR analysis indicates that the pair could stage a bearish technical correction back towards the 17.00 level.
USD/ZAR medium-term price trend
The US dollar has started to turn lower against the South African rand, after the pair found strong resistance from the 19.50 level.
Since the outbreak of the coronavirus, the South African rand currency has been hit particularly hard.
USD/ZAR technical analysis shows that a massive inverted head-and-shoulders pattern has been triggered into action.
The daily time frame shows that the inverted head-and-shoulders pattern holds an upside projection of around 5.00.
The price is currently pulling back towards the neckline of the mentioned bullish reversal pattern, around the $17.60 area.
If neckline support from the inverted head-and-shoulders pattern holds then bulls may start to rally the price towards the 23.00 area.
USD/ZAR short-term price trend
USD/ZAR technical analysis highlights that the pair has a negative short-term trading bias while the price trades below its 200-period moving average on the four-hour time frame, around the 18.05 level.
The four-hour time frame shows a bearish breakout from a symmetrical triangle pattern has recently taken place.
The size of the triangle pattern implies that the USD/ZAR pair could fall towards the 17.00 support level over the short term.
Short-term technical analysis also highlights that the USD/ZAR pair could suffer heavy losses if the 17.00 level is broken.
USD/ZAR technical summary
USD/ZAR analysis shows that a bearish breakout from a triangle pattern is currently underway. A decline towards the $17.00 level could take place in the short term.