The USD/ZAR has proven particularly dangerous the past handful of days, and opened with a gap lower this morning rocking speculative positions yet again.
The USD/ZAR is trading near 17.26100 as of this writing, but readers are urged to compare this to the market price as they examine the currency pair. The USD/ZAR has provided speculators with a volatile range the past week of trading and this is likely to continue in the short term as financial houses try to find a justifiable equilibrium. The hard-hitting range delivered in the USD/ZAR has likely caused day traders a large amount of emotional stress if they have not been using solid risk management.
The USD/ZAR Reacted with a Violent Surge Higher in the Middle of the Week
After touching a low of nearly 16.89000 early Wednesday morning, the USD/ZAR began to incrementally start edging higher reaching a high of around 17.27000 later that day, but that wasn’t the dramatic part of the week’s trading. On Thursday after touching a low near 17.06300, the USD/ZAR suddenly surged higher and came within sight of 17.96200 this as political news regarding the South African President rupturing what had been relatively calm waters.
However, after climbing within shouting distance of the 18.0000 mark momentarily, selling began to ensue. Late on Thursday the USD/ZAR was touching the 17.50000 ratios, and then on Friday the currency pair showed rather a reliable trading range ability and closed near the 17.44000 before going into the weekend. The gap lower in early trading today has seen the USD/ZAR sustain a lower price value, but traders should remain rather cautious as they pursue the forex pair.
USD/ZAR Volatile Range Raises Questions about Durable Resistance
The move higher last week in the USD/ZAR which destroyed short-term resistance levels will not be forgotten soon by speculators who were on the wrong side of Forex price action. If the 17.35000 to 17.37000 hold back slight bullish buying, however, then this could reignite bearish sentiment which has been seen in the USD/ZAR the past month.
- Political storms surrounding the South African President are known and may continue to spur volatile movement in the USD/ZAR, but for the moment financial houses appear to have digested the latest round of news and rumors.
- Having produced lower values only one week ago and then suffering an eruption higher in value, the USD/ZAR may be able to re-establish its bearish momentum and test lower depths again, but traders need to be conservative and use solid risk-taking tactics.
A move below the 17.25000 ratios that is sustained in the short-term may suggest that technically the USD/ZAR can track lower. If current support levels near the 17.24000 and 17.22000 marks become vulnerable speculators may be willing to wager on a test of lower depths. However, traders should remain realistic and be willing to cash out winning positions when they develop.
USD/ZAR Short-Term Outlook:
Current Resistance: 17.34100
Current Support: 17.22100
High Target: 17.44800
Low Target: 17.06900
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