USD/ZAR: Lower Value Range Traversed Again as Bears Emerge

Robert Petrucci

The USD/ZAR has firmly re-established its bearish momentum again as speculators contemplate the Forex pair’s next moves.

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After hitting high water marks near the 15.61000 level on the 11th of January, the USD/ZAR has incrementally traversed lower. In trading this week the Forex pair has been able to puncture the 15.00000 mark and has re-established its ability to traverse its lower value range, and put it within sight of lows made the middle of December until the first week of January.

As of this morning, the USD/ZAR has sustained its value below the 14.90000 mark, and if current trading is able to prove capable of hovering near short-term support levels, speculators will be faced with a serious question regarding their perceptions about potential direction. The USD/ZAR has been within a long-term bearish trend and its lows seen in December and early this year began to test values seen in January of 2020.

Current support near the 14.79000 may prove influential if it is punctured lower. If the USD/ZAR can firmly trade below this important support level, it may create additional downward momentum and a retest of values near the 14.71000 to 14.53000 junctures could ignite. Technical charts demonstrate that trading within the current values of the USD/ZAR is rather sparse, and speculators should monitor prices closely. If the 14.85000 proves vulnerable and is punctured lower, it could set off a rather volatile dose of trading.

Global risk appetite this morning remains steady and even optimistic; the USD/ZAR may continue to see bearish momentum incrementally build upon its long-term trend. Traders should contemplate using resistance levels which are rather close to current market prices as stop loss ratios. Yes, the USD/ZAR recently proved that reversals higher are certainly a possibility, so risk management needs to remain vigilant. However, in the near term, the USD/ZAR appears likely to continue to offer better risk/reward scenarios for traders who are sellers.

Because the USD/ZAR was able to produce a solid amount of downward momentum yesterday and has sustained its bearish trend this morning, traders may be tempted to get greedy and stay in trades too long. Short-term traders should consider the amount of leverage they are using wisely when trading the USD/ZAR near term and cash in winning positions before they vanish. Traders who wish to stay in positions longer and pursue further downside momentum should use trailing stops so they protect profits.

South African Rand Short-Term Outlook:

  • Current Resistance: 14.94000
  • Current Support: 14.79000
  • High Target: 15.17000
  • Low Target: 14.53000

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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