The current trading range of the USD/ZAR has been strong and allows speculators to test both sides of the forex market by taking advantage of existing market conditions.
Experienced traders know that forex demands different trading techniques depending on the currency pair which is being speculated. Recent trading within the USD/ZAR highlight this philosophy as the pair continues to embrace a rather nifty range, one in which both side of the trading – buying and selling can be effectively debated and implemented effectively.
A look at a five-day chart of the USD/ZAR shows the currency pair has largely traded between 17.0000 and 17.5000. While this may appear to be a large window for traders who are not careful with the amount of leverage they use, the actual change in value for the USD/ZAR is by many standards fractional at best. The limited scope of the trading range of the South African Rand allows a trader who uses risk management wisely an opportunity to test waters and put on short term trades. Speculators who are used to having their emotions tested on a daily basis may actually feel comfortable while holding a USD/ZAR position near term.
Resistance for the South African Rand continues to demonstrate strength near the 17.5000 level. Traders with an inclination to sell the USD/ZAR can enter the market between 17.3000 and 17.4000 with entry positions and seek downward cycles of trading and hope to achieve profits with quick gains using take profit capabilities around the 17.1500 to 17.2000 junctures. Short term traders who are attempting targeted trading using carefully chosen entry points as selling positions should view resistance above the 17.5000 as a solid mark.
As said above, depending on the currency pair and the trading environment that exist different trading methods must be implemented. While it is recommended using a stop loss near 17.5000 to 17.6000, this could knock a short seller out of the game too early if they are seeking downside action and an increase of value from the South African Rand. Speculators should be careful and not put their stop losses too close to the current market price, traders need some room for price ranges to move in order to test the market successfully.
Traders who believe the USD/ZAR is overvalued at marks of 17.1000 to 17.1500 can easily justify the buying position of the currency pair at those levels and seek known resistance above. Current market conditions for the USD/ZAR opens the door to different trading perspectives based on its market price as long as the current range of 17.0000 to 17.5000 holds strong.
South African Rand Short Term Outlook:
Current Resistance: 17.5000
Current Support: 17.2000
High Target: 17.6000
Low Target: 17.0000