A slight short term move higher in the USD/ZAR could attract the attention of speculators who want to test resistance levels.
After testing significant long term lows only one week ago, the USD/ZAR has produced a slight incremental climb higher. Intriguingly this reversal upwards has not been violent, nor fast, actually the move higher has been almost polite. Speculators are certainly correct if they believe the current price range of the USD/ZAR may prove to be an important testing ground near term.
Resistance near 14.18000 to 14.21000 is within sight and traders will want to see if the price of the USD/ZAR continues to sustain values below these junctures. Technically resistance levels look durable and they have not been hugely tested since the end of the first week in May. The USD/ZAR has produced a strong long term bearish stance and its trajectory appears to be indicating there may be more room to traverse lower.
However speculators who believe that a natural cyclical higher reversal will occur before another rampant move lower cannot be faulted. Forex does not move in one direction and the USD/ZAR like every other major currency pair is susceptible to fluctuations. The question speculators need to address is where the greatest amount of risk reward is situated short term. While the long term prospects of the USD/ZAR seem to point towards the potential of further bearish momentum, traders who are skeptical may prefer to aim for nearby resistance as a place to target quick hitting buying positions.
If the 14.20000 juncture begins to see sustained trading above this value, traders can logically target the 1.428000 mark for potential fast outcomes. However because the USD/ZAR has proven to consistently reverse off of resistance and reestablish its bearish trend, traders who are looking for upside action should not be surprised if the market suddenly launches a trajectory downward again, so they should not be overly greedy.
Short term support near the 14.10000 juncture should be watched, if this price collapses and the 14.07000 to 14.05000 level begins to be tested the USD/ZAR could make another effort to puncture the 14.00000 level. Even after the slight incremental climb higher produced the past week of trading, the USD/ZAR was trading near a low of 13.95000 on the 12th of May. The small move higher may run out of steam near term, and the bearish momentum of the USD/ZAR may prove to be strong and traders who target support levels may find their wagers rewarded.
South African Rand Short Term Outlook:
Current Resistance: 14.21000
Current Support: 14.10500
High Target: 14.28000
Low Target: 13.98000