The USD/ZAR has continued to incrementally see its support ratios penetrated the past few days of trading and they still appear vulnerable.
As of this writing, the USD/ZAR is trading near the 14.17000 mark. Take into consideration that the lows achieved on the 6th of June around 13.36000 make the Forex pair appear like it is locked into a bullish drive higher, and traders can be forgiven for this opinion. However, the past few days of trading have seen reversals begin to take hold and produce incremental bearish momentum which has penetrated short-term support levels rather consistently. Bearish speculators who have gone into hiding the past few weeks may want to have a glance at technical charts.
Before going into last weekend, the USD/ZAR did manage to come within sight of the 14.00000 juncture. A low of nearly 14.00070 was attained before a reversal higher ensued. And before finishing Friday’s trading, the USD/ZAR essentially finished the day within proximity to the 14.20000 level. Upon opening for trading this morning, though, the USD/ZAR has ticked slightly lower and support levels which did prove vulnerable on Friday appear ready to be tested again.
If the USD/ZAR can sustain its price below the 14.21000 level and continue to incrementally track lower, bearish traders may feel the 14.11000 to 14.09000 junctures are appealing as targets. After being locked into a rather progressive bullish move higher the past few weeks, traders are definitely right to feel a bit apprehensive about pursuing moves lower. However, on the 21st of June, the USD/ZAR was trading near the 14.40000 mark and, since then, has steadily demonstrated a rather consistent move downward.
The question speculators should be asking is if the sudden and strong bullish wave higher which began to appear towards the end of the first week in June has run out of power? There are no guarantees, but from a risk/reward perspective, there seems to be more value to attain to the downside, compared to climbs upward. Resistance near the 14.21000 should be monitored closely; if this ratio is able to hold, it could be a rather strong indication that additional selling pressure is going to be produced.
Selling the USD/ZAR in the short term while using limit orders placed slightly above the current price may prove a worthwhile opportunity for speculators. After three solid weeks of bullish momentum, it appears that the USD/ZAR may be ready to demonstrate an ability to reignite bearish sentiment and target support levels which look rather attractive.
South African Rand Short-Term Outlook:
Current Resistance: 14.20600
Current Support: 14.11000
High Target: 14.28500
Low Target: 14.03000