The South African Rand continued its strong bearish pace before going into the weekend. The USD/ZAR hit the 16.16000 mark temporarily but has reversed higher since then. Support levels near the 16.10000 level will likely continue to perform as strong psychological support, but the ability of the USD/ZAR to sustain its stronger mid-term values certainly has speculators asking when the support target of 16.10000 will crumble and be punctured lower.
However, trading early this morning has seen more bullish momentum come into the USD/ZAR short term and traders may want to prepare themselves for cautious price action in the coming days. Risk appetite is likely to be fragile this week as the US election approaches and investors worldwide try to position themselves for outcomes which are not known. While the USD/ZAR has definitely been able to achieve a solid mid-term bearish trend, the coming days may present an opportunity for speculators to wager on reversals higher which have also been seen over the last few months when the South African Rand has challenged the value range it is traversing now.
Technical traders have to decide on their perceptions and ask if the USD/ZAR is ready to overcome the strong support levels it has demonstrated within the 16.20000 to 16.10000 vicinity. While it does appear these support levels look vulnerable and may be ready to be punctured lower the question is when it will happen. Short term caution in the global market place may not help speculative sellers.
However, traders can also point out that while global equity markets have been mixed recently they are maintaining their stronger stances, particularly in the US indices. While the mixed results have factored into investor sentiment recently, in fact the USD/ZAR has continued to mount solid bearish momentum and been progressively challenging support levels and lowering resistance junctures incrementally.
The USD/ZAR is near the 16.28000 value mark as of this writing and traders may want to continue to seek downside price action with selling positions. Placing stop losses near resistance targets may prove adequate and the speculative positions pursing more downside action should also have take profit orders working to grab winning trades if they bear fruit.
South African Rand Short Term Outlook:
Current Resistance: 16.40000
Current Support: 16.20000
High Target: 16.47000
Low Target: 16.13000
