The USD/ZAR has been battling within a rather consolidated range the past week-and-a-half, but yesterday saw upside momentum take hold. The USD/ZAR’s price action towards the upper limits of its bearish price range may prove to be intriguing for speculators who believe that the Forex pair has the capability to once again demonstrate that another move lower will emerge sooner rather than later.
As of this writing, the USD/ZAR is hovering below the 14.40000 mark, and some downside price action has begun to show signs of life technically. The USD/ZAR has been within the grasp of a fairly persistent long-term bearish trend. Yes, there have certainly been periods when the South African rand has reversed higher against the USD, but the price action within the Forex pair has largely correlated to other major Forex pairs.
Resistance junctures between 14.40000 and 14.43000 should be watched closely by traders. If the USD/ZAR is able to sustain its values below these resistance levels, speculative selling may begin to see an influx of momentum based on the notion that support levels below will begin to become attractive and capable of not only being targeted, but attaining.
The USD/ZAR has enjoyed a tight range since the middle of April, and if nearby support which has been created because of the move higher the past day near 14.34000 begins to look vulnerable, this could set off alarm bells for further downside action. Lower support of 14.22000 has proven to be exceptionally durable since April the 21st, and it is this level which bearish traders should keep in the back of their minds.
Selling the USD/ZAR near its current resistance junctures could prove to be worthwhile for speculators. The USD/ZAR has enjoyed a rather solid bearish trend and it may have further room to roam downwards taking into consideration its current value from a technical perspective.
Traders should not become overly greedy and be willing to cash out profits if they are attained with quick-hitting trades that target nearby support. There is reason to believe that the current technical value of the USD/ZAR looks overbought near the 14.40000 mark. Traders may want to consider going short on slight moves higher with the belief that bearish sentiment will re-establish its momentum near term.
South African Rand Short-Term Outlook:
Current Resistance: 14.41100
Current Support: 14.34000
High Target: 14.49500
Low Target: 14.25000