After almost hitting the 14.00000 support ratio on the 25th of June, the USD/ZAR has generated additional buying power and is challenging short term sentiment.
The USD/ZAR is traversing near important highs in early trading today. The USD/ZAR is near the 14.30000 level and produced a high of 14.36000 yesterday. On the 21st of June the USD/ZAR did hit the 14.40000 juncture, slid slightly lower and almost retested the high the next day. After failing to penetrate the higher values, the USD/ZAR feel swiftly and hit a low of nearly 14.00000 on the 25th of June.
Speculators who have bearish sentiment have likely been tested quite sternly the past handful of trading days. The incremental rise in value of the USD/ZAR may be catching bearish traders by surprise. Technically the USD/ZAR has been able to produce a rather convincing upwards trajectory since the 4th of June, when the Forex pair was trading near an important low of nearly 13.380000.
Traders who continue to have a selling perspective should be careful and not allow themselves to fall prey to the temptation to blindly short the USD/ZAR at its current price levels. While it might prove the correct mid-term outlook to have a bearish outlook for the Forex pair, the short term pursuit of selling positions has likely proven to be a costly endeavor. Traders need to definitely be using proper risk management under the current circumstances, and if selling positions are being initiated stop losses need to be carefully chosen to protect against the potential of stronger moves higher.
From a risk reward standpoint, it makes some sense to believe there is more room to be attained by selling the USD/ZAR compared to buying. However, short term conditions have not made this an easy task, and traders who have the ability to buy the USD/ZAR and simply aim for nearby take profit targets which are near resistance levels within sight of current technical ratios may prove to have the more productive trading results in the short term.
Bearish traders should remain patient, and perhaps consider waiting for favorable momentum to be demonstrated in a solid manner before pursuing selling positions. If the USD/ZAR is able to penetrate the 14.25000 level and sustain values beneath this mark, targeting the 14.20000 could prove worthwhile. However, the choppy conditions within the USD/ZAR have produced difficult trading for sellers the past few weeks and should remain conservative.
South African Rand Short-Term Outlook:
Current Resistance: 14.36000
Current Support: 14.26000
High Target: 14.42000
Low Target: 14.14000