The ZAR/JPY currency pair has been trading downwards since the end of July after it reversed south from the upper boundary of the long-term descending channel at 7.81.
Currently, the exchange rate is testing the lower channel line at 6.85. From a theoretical point of view, it is expected, that a reversal north could occur in the nearest future, and the rate could reach the upper channel line in the medium term.
However, note, that the pair is pressured by the 55-, 100– and 200-hour SMAs, currently located in the 6.93/7.01 range. Thus, if the given channel does not hold, some downside potential could prevail in the market. A possible downside target is the psychological level at 6.50.
