COMMENT-South Africa's rand eyes a significant tipping point

March 5 (Reuters) - The rand has staged a sizeable recovery amid a broad-based dollar decline to the extent that a significant technical tipping point is coming into view.

This week's USD/ZAR's slide has fully negated the February 28 18.4350-18.7175 rally. The prospect of a major shift in market sentiment towards the dollar and its usual haven quality could drive USD/ZAR down to the key 100-day moving average. The average, currently at 18.2673, has supported the market since mid-December and has been backed up by the slower, 200-day moving average, today at 18.1473.

USD/ZAR has fallen below its daily Ichimoku cloud, 18.4250-18.6769, and eyes the February 24 18.2950 low. A key Fibonacci retracement level, taken off the 17.0375-19.2300 September-January rally, also provides a bearish objective at 18.1338.

The removal of several key support points could open a bigger USD/ZAR drop with potential targets of 17.6200 and 17.2775, December 12 and November 7 lows, respectively.

The demand for U.S. bonds, combined with growing expectations of lower U.S. interest rates and concerns about economic growth, appears to have offset the typical safe-haven buying of the dollar amid a trade war and rising tensions over the conflict in Ukraine. While this has allowed the rand to strengthen, persistent uncertainty surrounding tariffs, trade wars, and geopolitical developments could limit an overly optimistic stance in the rand market.