After hitting an apex of nearly 18.58000 briefly in the middle of last week, the USD/ZAR currency pair is trading early this morning near the 18.26000 ratio. The reversal lower from highs seen last Thursday were quick, but the USD/ZAR remains seemingly locked within the higher range of its long term price charts.
Global Markets are Nervous and this will cause more volatility for the USD/ZAR
Traders should certainly not count on tranquil price action from the USD/ZAR in the near term. Financial markets led by global equity indices remain jittery at best and the whipsaw results throughout Forex will continue to be demonstrated in the days ahead.
Support levels may look enticing if a speculator has a bearish bias, but targets should be kept realistic. Yes, early last week on Tuesday the USD/ZAR touched the 18.00000 down below, but within a little while a reversal higher soon developed. Sellers of the USD/ZAR should likely be looking for very quick results and be prepared for reversals higher soon after.
Support near the 18.20000 mark should be watched in the near-term, if this level continues to prove durable it may be a signal additional nervous buying could develop. The U.S Federal Reserve was dealt more troubling data late last week regarding inflation, and the U.S central bank is likely to remain hawkish which should not benefit the South African Rand.
Risk Taking Tactics in the USD/ZAR should be considered carefully
- If support levels continue to look strong, it may prove worthwhile as a wager to speculate with a buying position using conservative leverage and a price target that is near - for a quick hitting trade.
- The nervous conditions in the USD/ZAR as it trades above the 18.00000 need to be given attention and it likely more volatile results will be seen in the coming days.
While it may seem logical to believe the USD/ZAR is overbought, the trend of the currency pair remains stubbornly bullish, and it is hard to argue against the belief additional upwards momentum may develop. Resistance levels should be watched carefully and if the 18.30000 mark begins to look vulnerable in the short term it could mean another test higher can be pursued.
Choppy conditions are making the broad Forex market dangerous and the USD/ZAR is not immune to the risks. Traders need to be cautious andhave goals in mind that can be achieved with solid risk taking tactics such as secure take profit orders that are not overly ambitious.
USD/ZAR Short Term Outlook:
Current Resistance: 18.31200
Current Support: 18.21600
High Target: 18.37100
Low Target: 18.14000
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