USD/ZAR: Challenges Speculative Traders

Robert Petrucci

The USD/ZAR has delivered a challenging trading environment but technical traders may be able to take advantage.

Technical traders who were able to shut out the noise and only focus on the USD/ZAR charts may have found profitable trading opportunities the past couple of days. A bullish trend that emerged in the USD/ZAR since late July has seen a reversal lower since late last week. The 17.85000 mark held last week as a resistance juncture and has witnessed a slight selloff of the USD/ZAR.

Interestingly, while the reversal downwards has been expected, its timing may prove confusing for any trader who is influenced by economic news from the outside.  While the USD/ZAR has begun challenging support levels again, the price of gold has whipsawed violently in the commodity market as profit-taking and speculative trading for the precious metal mounts.

The five-day trading range for the USD/ZAR has been largely between 17.22000 and 17.78000. However, since late last week resistance levels have been incrementally decreasing and this will allow speculators to wonder if the USD/ZAR is getting prepared to once again reassert a bearish trend.  The past few weeks of trading though for the USD/ZAR, has seen the forex pair actually experience a rather strong bullish trend, which did not correlate to the price of gold and the stronger values of the commodity.

It is important for traders to understand market forces do not work in tandem sometimes; assets often are a step ahead and a step behind of perceived influences. Technical traders who are focused on charts will likely have an advantage with the USD/ZAR if they can focus on the forex pair’s trading range alone. Support near the 17.38000 level is close, taking into consideration the current price levels for the USD/ZAR.An important inflection point is likely the 17.35000 mark and if trading can be sustained below this value it will raise the eyebrows of speculators.

The USD/ZAR is a challenging trade at the momentum because of its price range and the outside influence caused by news in the gold market.  Technical traders need to be patient, practice solid risk management, and consider their positions carefully.

The USD/ZAR may produce consolidated trading the next couple of days within its current price range as existing support and resistance levels highlight short term trends. Traders should try to take advantage of prevailing momentum. And if the USD/ZAR trades near the 17.38000 level, speculators may want to look at this as a buying position to see if a slightly bullish trend is exhibited.

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South African Rand Short Term Outlook:

Current Resistance: 17.65000

Current Support: 17.38000

High Target: 17.85000

Low Target: 17.30000

USD/ZAR

Robert Petrucci
Robert Petrucci has worked in the Forex, commodity, and financial profession since 1993. Important aspects of his work involve risk analysis and advisory services. As an advisor in a Family Office he maintains a conservative approach for wealth management and investments. Robert also works in private finance with investors and companies delivering financial and management services.

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