The USD/ZAR moved within a solid range on Tuesday and the currency pair may be able to accomplish the same story in forex today. A strong resistance level has proven capable of reversals near the 17.2000 to 17.3000 levels and traders may continue to seek selling opportunities around this neighborhood.
With current resistance levels perched between 17.2000 and 17.3000 a selling window appears to offer a capable short of the USD/ZAR. Yesterday’s trading may not repeat itself one hundred percent, but there is a chance to sell the US Dollar at these levels against the South African Rand and seek downside momentum.
The support level of 17.1000 looks vulnerable and will likely be tested in trading soon meaning a reasonable target for the next move is likely to 17.0000 regarding downward pressure. Traders always need to take ranges and the potential of price swings and keep them in perspective. The band of value being discussed here is not wide. A legitimate price range for the USD/ZAR appears to be 16.8000 to 17.3000. Traders need to keep this value range in their thoughts and place their positions accordingly if they seek short term moves.
The last time the South African Rand traded above the 17.3000 value level against the US Dollar was in early June. Again, I preach the importance of trading windows and risk, the upside risks for the USD/ZAR to move higher with pronounced buying seems to be limited in scope, which highlights the potential for downside movement if you can sell the ZAR at its current levels around the 17.1000 juncture and use stop losses wisely.
The price of Gold has proven to be stable the past week too, and it actually has maintained its high values well. The precious metal serves as a vital sentimental instrument when trading the South African Rand and its importance should be considered when correlating values to the USD/ZAR. If global equity indices and the price of Gold remain solid and even gain in value, this should give traders more confidence about selling the US Dollar against the South African Rand in the short term.
South African Rand Short Term Outlook:
Current Resistance: 17.3000
Current Support: 17.0000
High Target: 17.4000
Low Target: 16.7000
