Short-term support levels have been brushed aside as the USD/ZAR has demonstrated that its bearish trajectory can still be contemplated.
The past week of trading has seen the USD/ZAR produce evidence that its bearish trend remains intact. After hitting a high of nearly 15.10000 on the 25th of March, the USD/ZAR powered lower and through the 15.00000 mark easily and sustained its downward momentum. As of this writing, the USD/ZAR is trading near the 14.58000 level with ultra-important support levels nearby.
Support near the 14.47000 juncture is within sight and the reason this value is crucial is because it was last touched on the 24th of February, just before the USD/ZAR started to see buying power produce a run higher, which reached a climax of 15.57000 on the 8th of March. Intriguingly, the USD/ZAR has correlated nicely within the global Forex market to other major currencies and in fact can be considered a barometer regarding behavioral sentiment.
Technically, speculators who have pursued the USD/ZAR have certainly witnessed whirlwind conditions the past month of trading. After hitting mid-term highs on the 8th of March, the USD/ZAR was trading near the 14.60000 level on the 17th of March. Now within the midst of another downturn, current support levels must be watched closely and cautious traders who favor selling positions will likely want to see the USD/ZAR sustain values below the 14.60000 level.
If the USD/ZAR proves to have bearish fuel left in its arsenal, the next support junctures that should be watched are the 14.51000 to 14.46000 levels. The three-month low of the USD/ZAR was approximately 14.38000, which was tested on the 16th of February. It is this support level which, if tested, could produce a swirl of volatility since it last sincerely traded below the 14.39000 juncture in January of 2020. In other words, the USD/ZAR is once again within sight of long-term lows just before the onslaught of coronavirus engulfed the financial markets.
Technical traders who believe the USD/ZAR has more ability to traverse lower may want to see the value of the Forex pair prove it can sustain its current values first. Short-term traders who are looking for slight reversals higher may want to wager on upside action by placing buy orders near current support levels. The USD/ZAR is likely to produce choppy results near term as the Forex pair tests its current low water marks.
South African Rand Short-Term Outlook:
Current Resistance: 14.67000
Current Support: 14.51000
High Target: 14.83000
Low Target: 14.39000