USD/ZAR: South African Rand’s Reversals Gaining Strength

Robert Petrucci

The short-term range of the USD/ZAR has begun to demonstrate quick reversals and incrementally higher resistance levels.

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The USD/ZAR continues to trade within the stronger elements of its bearish trend. However, in recent days, the South African Rand has begun to display a tendency to traverse higher resistance levels as it also highlights slightly higher support ratios. On the 25th of November, the 15.10000 mark below was challenged, but a reversal higher nearly to the level of 15.50000 soon followed in the last days of the month.

Trading early this week has seen the USD/ZAR again move lower. Yesterday and early today have seen the 15.20000 support level targeted, but it has also produced reversals higher. The value of the South African rand may appear fundamentally overvalued to some analysts, particularly those who are monitoring the price of gold. Gold has seen its value falter in the mid-term as global deflation concerns grip central banks and the accumulation of the commodity appears to have grown less fierce.

However, from a technical viewpoint, the USD/ZAR remains near important support levels and some speculators may think there could be further downside action which will develop. In order to create a short-term desire to continue selling the USD/ZAR, the Forex pair may have to show an ability to puncture support within the 15.20000 to 15.10000 levels. Yes, support near 15.20000 was tested again earlier today, but reversals have proven strong and this means selling the USD/ZAR within these lower values is challenging.

Traders who want to pursue selling positions of the USD/ZAR may want to take advantage of runs higher in which resistance is put to the test. Near term, the 15.40000 to 15.48000 junctures look like reasonable territory in which to try and short the USD/ZAR. The additional ammunition of positive global risk appetite continues to create the rather comfortable perception that the ability of the USD/ZAR to break above current resistance levels is limited.

For the moment, the USD/ZAR remains a viable candidate for short-term quick trades which seek to take advantage of its consolidated range. The 15.20000 to 15.45000 range may continue to dominate the trading landscape for the immediate future. Speculators who want to seize upon a trend will have to practice patience near term as the value of the USD/ZAR battles its rather tight range.

South African Rand Short-Term Outlook:

  • Current Resistance: 15.48000
  • Current Support: 15.20000
  • High Target: 15.53000
  • Low Target: 15.10000

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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