Trading early this week in the USD/ZAR has bolstered the notion that the Forex pair’s bearish trend remains dominant. After a slight resurgence of bullish activity last week, the USD/ZAR has demonstrated it is capable of sustaining values beneath the 15.00000 juncture. Yesterday’s trading was given an additional boost of bearish momentum when the USD/ZAR began to challenge the 14.90000 mark.
In early trading this morning, the 14.90000 has become a focus for technical traders, and if the level begins to prove durable and even acts as resistance, it likely indicates that additional bearish momentum could continue. The USD/ZAR is now challenging values it has not steadily traded since early February. If the Forex pair is able to hold onto its value range, the 14.81 support level should be the next logical focus for speculators contemplating support areas.
The 14.81000 juncture, if broken lower, would be critical because it could set off a test of programmed trading software within financial institutions, which might eye trading values last seen in January. Speculators need to understand that the trading of the USD/ZAR has certainly enjoyed a bearish trend, but upward reversals should still be expected periodically.
The ability of the USD/ZAR to reclaim values seen early this year has mimicked many other emerging market currencies against the USD. The South African rand is now testing values seen before coronavirus pandemic fears caused a slide in value. However, the price of the USD/ZAR may be viewed in a rather skeptical way by some analysts as they consider the fiscal complications South Africa faces.
However, the USD/ZAR is technically exhibiting a strong bearish trend and its momentum may not be ready to reverse in a strong fashion. Resistance levels near the 14.93000 juncture up to the 15.03000 to 15.17000 marks should be watched near term. If current price values for the USD/ZAR maintain their stance and trading is sustained near or below the 14.90000 mark, the resistance levels highlighted could work as stop loss ratios for speculators.
Selling the USD/ZAR after so much ground has already been accomplished by its bearish trend may seem like it is too easy, but trading against the trend could prove impractical. The USD/ZAR is within an important long-term price range, and if it continues to display downside momentum, support levels may continue to prove vulnerable near term.
South African Rand Short-Term Outlook:
- Current Resistance: 14.93000
- Current Support: 14.81000
- High Target: 15.17000
- Low Target: 15.08000
