After hitting the 2017 low of 7.77 mid-November, the South African Rand started to appreciate against the Yen in a channel up. During the past weeks, however, the pair has been trading in the 8.85/9.25 area, thus failing to form a distinctive wave up.
The Rand has spent the past few trading sessions along the senior channel line. In addition, it is trading near the upper line of the aforementioned range which is likewise the pair’s highest level since mid-2015. These two factors suggest that the pair might soon breach the senior channel and initiate a course towards the 8.90 mark.
The nearest support is provided by the weekly PP and the 200-hour SMA near 9.07. This area could hinder the Rand for some time, thus resulting in a slight period of consolidation.