The USD/ZAR has continued to display a rather swift bearish trend as it has broken free from January’s bullish cycle which caused difficult days for speculators who insisted on looking for more downside action. However, persistent traders have likely been rewarded the past couple of weeks as the USD/ZAR has demonstrated a clear ability to reestablish its long-term downward trend.
In early trading today, the USD/ZAR has proven quite capable of sustaining its bearish momentum and the Forex pair is now challenging late January 2020 values. Speculators who choose to continue to pursue downward price action will have to look at long-term charts to contemplate the next potential moves for the USD/ZAR. Support near the 14.35000 level appears to be a critical target; if this value is proven vulnerable, it could set off another wave of volatility.
The price of the USD/ZAR has resumed its bearish trend certainly, but it has not come without a fight, and cautious traders may suspect that a dose of higher reversals may be in store short term. However, wagering against the long-term trend could prove costly if a speculator is not using risk management wisely. Close take-profit marks are recommended for traders who insist on looking for technical moves higher. Global risk appetite continues to look steady as this week of trading gets started and it may prove dangerous to step in front of strong sentiment.
Traders should keep their eyes on the 14.51000 juncture as resistance. The USD/ZAR was able to traverse rather close to its current price vicinity in early December. After hitting a low of around 14.47000 on the 14th of December, the Forex pair struggled with reversals higher over the next month of trading. The current value of the USD/ZAR, however, is below the December lows.
If the USD/ZAR is able to sustain its current price levels without suffering a volatile reversal higher, it could be a signal that additional bearish momentum may develop. The bearish trend of the USD/ZAR needs to prove it is durable near term and be able to maintain its current values. If this occurs, speculators will not be faulted for considering further downside momentum as a legitimate path to pursue selling positions.
South African Rand Short-Term Outlook:
Current Resistance: 14.51000
Current Support: 14.36000
High Target: 14.63000
Low Target: 14.25000
