USD/ZAR: South African Rand Producing Good Holiday Intrigue

Robert Petrucci

The past two days of trading within the USD/ZAR have seen a test of higher resistance followed by a return to calm.

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The USD/ZAR has consolidated the past day after seeing a spike higher two days ago. The USD/ZAR reclaimed some tranquility after testing highs near the 14.91000 resistance juncture on Monday. A reversal lower on the same day saw a value of 14.55000 approached. As of this writing, the price vicinity for the USD/ZAR is near 14.63000 and what should intrigue speculators is the rather calms waters the Forex pair has displayed the past day.

Traders should be fully aware that holiday trading is now part of the Forex market, meaning volumes are becoming light as financial institutions and corporations begin to disappear for Christmas. The USD/ZAR is trading in a rather tight range early today, and this may prove an opportunity for speculators to take advantage of prevailing sentiment.

The question is where the prevailing sentiment will lead the USD/ZAR. After enjoying a solid bearish trend, the Forex pair did see a rather violent spike upwards only two days ago. Developing news regarding coronavirus hit global markets and caused a wave of risk-averse trading, which created enough momentum for the USD/ZAR to challenge resistance levels and brush them aside swiftly.

However, the reversal off those highs and the rather tranquil trading displayed the past day indicate fear may have subsided and the USD/ZAR will resume its bearish stance. Late last week, the Forex pair was challenging lows of 14.52000, which were last really traded in a sincere manner in late January of 2020.

The ability of the USD/ZAR to withstand the recent surge of risk-averse trading and begin testing its lower depths again may prove enticing to speculators who want to continue to pursue downside action with selling positions. Holiday season trading is an opportunistic playground for experienced speculators, because small trends, short-term reversals and occasional spikes become part of the trading landscape.

The USD/ZAR may prove it has the ability to pressure support levels, but traders should not expect giant moves near term. The best practice may be to wait for rises in value from the USD/ZAR upwards and be ready to launch selling limit orders which seek bearish reversals testing support. Resistance levels can be used as stop loss ratios, and if the current tranquility in the USD/ZAR proves adequate short term, this will help speculators pursue quick-hitting selling positions.

South African Rand Short-Term Outlook:

  • Current Resistance: 14.72000
  • Current Support: 14.57000
  • High Target: 14.83000
  • Low Target: 14.50000

USD/ZAR chart

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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