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  • USD/ZAR remains on the back foot near three-month low.
  • Sustained trading below key SMA keeps the sellers hopeful.
  • Bullish chart formation, oversold RSI conditions suggest intermediate pullback in prices.

While failing to extend the day-start pullback to 16.85, USD/ZAR drops to 16.80 amid the initial Asian session on Monday. As a result, the quote seesaws around the lowest since March 18 by the press time.

The pair portrays a bullish technical pattern on the daily chart amid oversold RSI conditions. However, a sustained trading below 100-day SMA favors the sellers.

Against this backdrop, the bears may aim for a descending trend line from May 21, currently around 16.58, as immediate support during the further downside.

Though, oversold RSI conditions might restrict the pair’s additional declines, if not then 16.00 and 200-day SMA level of 15.80 could lure the bears.

On the upside, a 100-day SMA level of 16.94 may offer immediate resistance to the pair ahead of the bullish formation’s upper line, at 17.05 now.

Should there be a clear break above 17.05, the bullish pattern gets confirmed, which in turn could the theoretical run-up towards 19.00. However, May 29 high of 17.67 and April 30 low of 18.00 could offer intermediate halts during the rise.

USD/ZAR daily chart

Trend: Pullback expected