The bearish trend of the USD/ZAR managed to break through important support levels late last week, and the Forex pair is sitting within a value range which may have speculators dreaming about another potential breakout. It has taken since late December of 2020, but the USD/ZAR has finally managed to puncture the 14.50000 to 14.40000 junctures and sustain value beneath these levels. As of this morning, the USD/ZAR is near the 14.25000 vicinity.
Speculators will need to look at long-term charts to gain a perspective if they intend on continuing to pursue downward momentum. The last time the USD/ZAR tested its present value range was in early January of 2020. Late in December 2019, the USD/ZAR did test the 14.00000 mark, but it was not able to puncture the level easily, and it needs to be remembered that this test took place before the advance of coronavirus concerns hit the global economy.
However, in February of 2019, the USD/ZAR was trading near the 13.30000 value. Speculators may believe that the USD/ZAR, based on this technical consideration, can trade lower from its current value range. Interestingly, as late as October 2020, the USD/ZAR was trading near the 16.40000 vicinity and was above this mark from March until September of 2020 while coronavirus implications cascaded through Forex.
Since late October of 2020, the USD/ZAR has provided a rather strong bearish wave of trading, but as pointed out, the 14.50000 juncture had proven to be quite durable until late last week. While global economic optimism is certainly being expressed, the notion that the USD remains within a weakened stance against many major currencies needs to be considered too, which may add fuel to speculative sentiment that the USD/ZAR may remain bearish.
Traders may believe that the USD/ZAR traversed downward too fast late last week, but the Forex pair continues to incrementally lower resistance levels. Traders may want to test the bearish momentum of the USD/ZAR and see if there is additional gas in the tank to ignite another leg down via selling positions with close stop loss orders used as protection to guard against potential reversals. Selling the USD/ZAR on slight moves higher may prove a worthwhile endeavor short term.
South African Rand Short-Term Outlook:
Current Resistance: 14.31600
Current Support: 14.20400
High Target: 14.36700
Low Target: 14.09000
