The USD/ZAR has reversed higher after challenging long-term support only one day ago and the higher values may be an opportunity for traders.
Speculators need to be careful with the USD/ZAR short term. A quick glance at a one-day chart may give the impression that the bearish momentum of the Forex pair has been reestablished short term, but another perspective raises the notion that short-term highs are actually being tested. If resistance nearby around the 14.70000 juncture is punctured higher, it could set off another test of yesterday’s upward reversal, which hit the 14.92000 mark.
Yesterday’s move higher in the USD/ZAR was stark and may have hurt speculators who have been pursuing bearish momentum. The past week of trading within the USD/ZAR has been choppy and traders may need to make sure their time parameters mirror the present turbulence within the Forex pair as it seemingly fights for equilibrium.
After achieving a low of nearly 14.40000 on the 16th of February the USD/ZAR has traded largely within a value band between the 14.55000 to 14.85000 junctures. These values have seen rather strong reversals on occasion. The current trading vicinity of the USD/ZAR needs to be carefully monitored. If the Forex pair can sustain its value below the 14.70000 mark, it may be a signal that additional bearish sentiment will develop short term.
However, because of the recent choppy conditions within the USD/ZAR, short-term traders may want to be conservative. One tactic to battle the current whipsaw-like trading being produced within the USD/ZAR is to actually consider buying positions if short-term resistance levels are punctured higher and seek momentum upwards. And, if support levels which are also nearby around the 14.64000 are broken lower, it may prove an opportunity to seek additional bearish action with selling positions based on momentum.
The past two weeks of trading within the USD/ZAR have been challenging. The bearish trend of the USD/ZAR is certainly still in effect, but short-term speculators need to adjust their sentiment until the Forex pair is able to exhibit a stronger move. Until the USD/ZAR reestablishes a firm trend, traders should consider trades that are short in nature and do not have distant targets. The USD/ZAR is likely to remain volatile near term as global risk appetite fluctuates.
South African Rand Short-Term Outlook:
Current Resistance: 14.73000
Current Support: 14.64000
High Target: 14.93000
Low Target: 14.59000