The USD/ZAR has broken through the 14.00000 with further bearish momentum and, curiously, resistance levels have also decreased. Traders who have been pursuing downside price action within the USD/ZAR are now faced with short-term price range considerations, and have to use long-term technical charts to factor the next potential moves.
The USD/ZAR is now trading within vicinity of values it has not sincerely tested since December of 2019. Importantly for speculative sellers is the acknowledgement that the last time the USD/ZAR moved within a serious cash range below its current ratios was in July of 2019. In other words, the bearish trend being demonstrated in the USD/ZAR has surpassed its achievements well before the impact of coronavirus hit the financial world.
The realization that resistance levels have also become demonstratively bearish also may be significant for speculators who want to continue to pursue selling positions of the USD/ZAR. The last time the USD/ZAR traded above the 14.20000 mark was on the 7th of May. Since the 19th of May, the resistance level of 14.14000 has proven significant. Friday’s test of lows near the 13.88000 did produce a slight reversal higher, but curiously, the 14.00000 ratio proved rather adequate as resistance.
In early trading this morning, the USD/ZAR continues to traverse near the 13.95000 juncture, and speculators may be tempted to use very close stop-loss fixtures above as a way to guard against higher reversals. Support near the 13.92000 to 13.90000 junctures does admittedly look strong, but traders may continue to aim for these nearby values for quick-hitting selling targets. The question is if the USD/ZAR can produce a significant amount of bearish trajectory below its current support levels.
While the USD/ZAR has certainly produced a rather solid bearish trend, traders rightfully can ask if much more room on the downside exists to take advantage. It may prove tempting to look for small reversals higher in the short term from the USD/ZAR if the Forex pair languishes within its current price range. However, traders will have to be nimble via their risk-taking capabilities and use their full arsenal of limit orders.
The USD/ZAR continues to signal further bearish momentum may be demonstrated within the Forex pair and a breakout is possible. If the USD/ZAR is able to break below the 13.88000 juncture, traders should expect volatility to develop and fast market conditions to unfold. Selling the USD/ZAR on slight reversals higher may be the best option for speculators short term.
South African Rand Short-Term Outlook:
Current Resistance: 13.98000
Current Support: 13.90300
High Target: 14.07000
Low Target: 13.81000
