An important aspect of successful trading is based on patience. Just because you as the speculator want and believe something will happen in which you will be able to profit from, doesn’t mean it has to happen within your preset time parameters. Successful traders know they need to be prepared to sit back and let the trading environment dictate values.
Leverage is vital in these instances, because the use of large positions can increase the amount of carrying charges a speculator will be hit with if they hold trades overnight on many forex platforms. You do not want to find yourself facing margin calls from your broker because of carrying charges as you pursue trades which need a few days to evolve.
The USD/ZAR has produced an extremely tight holding pattern and it is situated directly above crucial support levels which have held so far. The price of gold has also held onto its recent gains, which backs up the notion, though it could be proven wrong, that the USD/ZAR is trading with a strong fundamental correlation regarding the current values of the precious metal.
The 16.35000 to 16.40000 support range for the USD/ZAR remains a critical focus. The South African Rand has challenged these levels recently but experienced slight reversals higher. However, the higher values of gold are certainly creating the sentiment that resistance up above remains extremely strong and can be relied upon to continue speculating the USD/ZAR’s bearish trend will develop further.
Resistance of 16.55000 will be looked at with skepticism perhaps by speculators, meaning they may believe a level of 16.50000 can be sustained and will not be broken higher. However traders with experience know the markets do change direction and caution is important even when perceptions are firm. As the USD/ZAR languishes within an extremely short term range between 16.40000 and 16.43000, traders will certainly be tempted to pull the trigger and attempt selling positions.
Speculators are watching the South African Rand closely and are certainly wondering how long this consolidated and narrow trading range will hold. Technically the USD/ZAR remains a forex pair which looks like it will maintain its bearish trend and that short selling will remain the wise decision.
Traders do need to guard against sudden surges upward because there are no guarantees, but resistance if used as a stop loss does offer protection. Patience is the key in this trade, because when and if the South African Rand does break through support it may target values below which are unexpected.
South African Rand Short Term Outlook:
Current Resistance: 16.55000
Current Support: 16.40000
High Target: 16.60000
Low Target: 16.30000
