The years old story to ZAR is it remains extremely overbought and includes EUR/ZAR as much as USD/ZAR. Overbought for USD/ZAR derives from its price skyrocket from 8.00, 9.00 and 10.00 since the 2008 crisis. EUR/ZAR likewise skyrocketed from 10.0 and 11.00 since the crisis and never looked back. Last time EUR/ZAR saw 10.56 was January 2012 and price bolted to 17.47 highs January 2016.
EUR/ZAR from current 17.48 reaches dangerous and sell point price extremes at 18.06, 18.25 and 19.45. Since EUR/ZAR rose from 10.00 and 11.00 lows, it built support points along the way and those support levels made EUR/ZAR’s desperately needed fall much more difficult. So it remained in upper extreme overbought over longer periods. EUR/ZAR traditionally is a great moving pair but dangerously overbought. Like EUR/HUF, EUR/NZD trades above its USD counterpart in USD/ZAR.
Why both EUR/ZAR and USD/ZAR are at overbought extremes together is because both Correlate solidly at 91%, both prices varied just over 2% and both ironically are fast approching bottoms. EUR/ZAR viewed from USD/ZAR should trade between 17.29 to 17.11 from current 17.48.
From 17.11 is vital as two supports exists at 17.12 and 17.10 then 16.92. Outside 16.92 below is out of bounds and out of bounds from 17.29 above. The import of 16.92 is the bottom drops out as next support is located at 15.13, 14.76, 14.26 and 13.43. Intraday, EUR/ZAR is oversold, USD/ZAR overbought yet not to any alarming degree.
USD/ZAR from current 15.63 is held by supports below at 15.27, 15.25. Next below comes 15.11. USD/ZAR should trade V EUR/ZAR between 15.40 to 15.26. Current price at 15.63 is 23 pips out of bounds. The point at 15.11 is bottom and out of range if price trades below. The import of 15.11 is next major support exists at 13.66 then 12.47 and 11.67.
Brian Twomey, Inside the Currency Market, btwomey.com