USD/ZAR: Inflection Point Focus as Traders Weigh Sentiment

Robert Petrucci

The USD/ZAR is straddling the 15.00000 ratio as traders are being forced to contemplate their short-term sentiment.

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The USD/ZAR has traversed slightly higher again and is straddling the important 15.0000 mark as traders try to decide where their risk sentiment may lead them. Since the 17th of March, when the USD/ZAR rocked lower and touched the 14.62000 price, the Forex pair has offered a steady diet of upward trajectories. Support levels have incrementally risen since the middle of the month, and from the 25th of March until now, the USD/ZAR has created a short-term resistance level near 15.10000.

Likely causing stomach pain for short-term speculators is the long-term sentiment that the USD/ZAR has enjoyed a rather consistent bearish trend which they have been able to take advantage of. Deciding on short-term wagers which go against long-term notions is difficult for all traders; however, experienced speculators understand this is part of the trading environment and the challenge is to prepare tactically for scenarios such as these.

Yet, the intriguing aspect of the USD/ZAR is the technical perception that although the Forex pair has certainly increased in value the past couple of weeks with a slight bullish trend, the bearish track has not been broken. Unless the USD/ZAR can forcefully burst through the 15.10000 juncture and challenge levels near 15.22000, there is little reason to believe the Forex pair is going to re-engage in its early March battles which saw a high of 15.55000 on the 8th of the month.

Prior to hitting the March highs, the USD/ZAR was trading near the 14.47000 mark on the 25th of February. The South African rand does not trade in a vacuum and it correlates nicely with many other major Forex pairs. The wave of volatility reflected in the price of the USD/ZAR in March is a direct result of tumultuous trading via the USD due to turmoil in the US bond market in many respects.

The question for speculators is when the volatility will die down and if the long-term bearish trend of the USD/ZAR may reignite. In the short term, traders may want to consider selling the USD/ZAR on slight reversals higher which test current resistance levels.

Speculators should be wary of sudden volatility, but looking for lower values if the USD/ZAR trades above the 15.00000 may be the best speculative wager unless higher resistance levels are proven vulnerable. Traders should look for quick-hitting trades near term and expect choppiness to remain a central theme for the USD/ZAR.

South African Rand Short-Term Outlook:

Current Resistance: 15.02000

Current Support: 14.95000

High Target: 15.08000

Low Target: 14.85000

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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