The USD/ZAR has moved lower in early trading, and the velocity of bearish momentum has produced a technical breakout which is intriguing.
The USD/ZAR has seemingly waved goodbye to the 14.00000 level and is now traversing lower values not sincerely traded since early February of 2019. In early action this morning, another sell-off of the Forex pair has brought the USD/ZAR to a price vicinity of nearly 13.69000 with fast conditions evident. A move higher to approximately 13.78000 today seemingly sparked a significant bearish reversal, which has brought long-term support levels into immediate focus.
Technical traders will have to gaze at long-term charts to gain a perspective regarding the current value of the USD/ZAR. This is not to say that reversals higher will not occur and that the 14.00000 mark above will not be seen again, but the current price action of the USD/ZAR is certainly signaling that more bearish momentum could develop.
This test of values not experienced since February of 2019 creates the speculative perception that the USD/ZAR could now be in a position to test prices within the junctures of 13.58000 to 13.38000. Pinpointing the immediate direction of the USD/ZAR is speculative, but the trajectory of the Forex pair is within eyesight of important values which were last traded with consistency in January of 2019.
While technical traders may be wary of pursuing a one-way trading avenue at these bearish depths, the trend of the USD/ZAR continues to look significant and, until a test of resistance proves to have teeth, traders may be inclined to be sellers on any moves higher. Adding additional fuel to the speculative bearish fire is the acknowledgement that the price of gold has become bullish again, as concerns about global inflation begin to not only show signs of life, but also affect the price of a broad range of commodities.
After making a swift bearish move this morning, traders may not believe that too much room exists for another immediate leg down. While that may be a logical conclusion, from a speculative viewpoint, the consistent nature of the USD/ZAR’s rather strong bearish trajectory should not be dismissed too easily. Continuing to pursue selling positions with quick-hitting trades after slight reversals higher have been attained remains a rather intriguing speculative wager while aiming for support levels below.
South African Rand Short-Term Outlook:
Current Resistance: 13.82000
Current Support: 13.56000
High Target: 13.93000
Low Target: 13.31000