The South African Rand has been appreciating against the Japanese Yen since the beginning of August when the ZAR/JPY currency pair reversed north from the lower boundary of the long-term descending channel at 6.80 (1D time-frame chart).
From a theoretical point of view, it is likely that the exchange rate could reach the upper channel line located circa 7.60 within the following trading sessions.
If the given channel holds, it is likely that a reversal south could occur, and the general direction is expected to remain south for the medium term.
However, note that the exchange rate is supported by the 55-, 100– and 200-hour moving averages. Therefore, it is likely that a breakout north could occur in the nearest future. Important level to look out for is the Fibonacci 39.30% retracement at 7.79.
