USD/ZAR: Short-Term Traders Need Patient, Calm Perspectives

Robert Petrucci

The USD/ZAR has seen a strong bullish surge emerge the past week and speculators need to adjust their trading perspectives.

Advertisement
Take advantage of great ZAR trading opportunities now!

Trade USD/ZAR Now

The USD/ZAR has seen a bullish surge create havoc the past week for speculators who have been pursuing downside price action without proper risk management. The South African rand has joined a long list of major currencies which have lost value against the US dollar in recent days. Traders need to calmly adjust their perspectives short term and be patient. Speculators may believe that the USD/ZAR has to reverse lower, but yesterday proved this is not an easy forecast, because choppy conditions have produced whipsaw results.

In early trading this morning, the USD/ZAR continued to mount a fight higher, but the trend was seemingly brought to a halt at least for a while and slight bearish movement has been produced. The USD/ZAR is challenging values it has not traversed since November. The long-term bearish trend of the USD/ZAR may not have been killed the past five days of trading, but it certainly has been tested with the climb upwards, which has brushed aside resistance levels with relative ease.

Technical traders should ask how much more upside momentum can be accomplished and what timeframe this change of direction will last. They should also ask if any of the above really matters. The most important thing short-term traders need to address is how to make money via the moves of the Forex pair. Sentiment regarding the mid-term or long-term direction of the USD/ZAR is helpful, but it actually can be problematic when sudden bursts of counter-intuitive trading are demonstrated.

Short-term traders should use support and resistance levels as a way to enter limit orders. The climb of the USD/ZAR higher now needs to find a calm equilibrium. Until the USD/ZAR finds tranquil values, traders should expect some volatility. Traders should be cautious short term and use take profit orders wisely. They should not look presently for big trends to emerge.

It could very well be that a new mid-term trend is developing now, but before it gets a ‘stamp of approval’, traders can still try to look for short-term cyclical reversals within the USD/ZAR’s current value range. If the USD/ZAR does break above the 15.79000 resistance level, this could be a warning sign that the Forex pair may challenge higher values seen in early November and late October, but until then, speculators may want to simply pursue quick-hitting trades looking to take advantage of reversals.

South African Rand Short-Term Outlook:

  • Current Resistance: 15.64000
  • Current Support: 15.40000
  • High Target: 15.79000
  • Low Target: 15.24000

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.

Did you like what you read? Let us know what you think!

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

0 User comments

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

Read more
Add new comment
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.