The USD/ZAR has busted through critical support levels early this morning as a wave of selling continues to improve the value of the South African Rand. Current support levels near 16.6000 appear vulnerable and it may be realistic to believe the South African Rand could confront lower junctures and challenge the 10th of June mark of 16.4500 which sparked a reversal upwards.
The current USD/ZAR short trend may continue to attract speculators if Gold is able to sustain its higher price range today and tomorrow. After achieving record highs, traders should keep their eyes on the precious metal to see if any short term profit taking emerges. If global risk appetite remains strong in the equity indices and Gold manages to maintain its status as a safe haven among investors, the USD/ZAR may also sustain its solid bearish trend.
One of the interesting points about the recent selling of the USD/ZAR is that resistance levels have proven noteworthy and guideposts for speculators with solid risk management. Since the middle of June resistance levels technically for the USD/ZAR have trended downward and traders who believe there is a more bearish sentiment which will develop may look at the 16.9500 level now as an opportunistic juncture to place a stop loss if they are short sellers of the currency pair.
The USD/ZAR has been rather consistent the past few weeks for speculators. The 16.5000 level is important, because around this price value within the currency pair in June a solid amount of bullish behavior returned. The question is if a sustained higher value in Gold and solid risk appetite are enough to break current support levels and create a search for further movement downward which has not been seen since March.
Short term speculators who believe the USD/ZAR remains a short-selling candidate need to use risk management wisely. Traders with deeper pockets who want to sell the forex pair should consider stopping loss marks near the 16.9500 level. However, the South African Rand has already sparked downside pressure this morning, so traders should be braced for some reversals which will test their emotions if they are selling into this market.
South African Rand Short Term Outlook:
Current Resistance: 16.8500
Current Support: 16.6000
High Target: 16.9500
Low Target: 16.5000
