USD/ZAR & USD/IDR

Emerging market currencies are going through challenging times as they lose ground against the U.S. dollar. After two decades of massive depreciation against the U.S. dollar (1980-2000), most of the EM currencies stabilized and started moving sideways in a wide range. Latest sell-off pushed the cross rates to test their upper boundaries. South African Rand reached the upper boundary of its contracting range (possibly a symmetrical triangle) and Indonesian Rupiah the upper boundary of its flat consolidation range. The question now is whether the decade long consolidations will resume or will be followed by strong breakouts. These long-term charts should be on our watch-list in the following months.