Technical traders of the USD/ZAR who are not keen on watching news regarding the day-to-day storylines of South Africa may want to reconsider their viewpoint that fundamental sentiment is not important. The USD/ZAR has surged higher in the past few days and resistance levels have been brushed to the side. As of this writing, the USD/ZAR is traversing near the 14.77000 mark and current resistance levels are values not demonstrated since March of this year.
The specter of political and community upheaval in South Africa will not allow any financial institutions to rest easy if they need to make transactions in the South African rand near term. Traders should remain alert and pay attention to the news. If conditions were to stabilize on the streets which are seeing large amounts of discord, this would certainly help the USD/ZAR find some tranquility. However, the situation in South Africa remains fluid and the troubling consideration that tensions could remain high will have an effect on the USD/ZAR.
While it may seem brutish to try and take advantage of the current tensions in South Africa via the trading of the USD/ZAR, it may also prove to be a solid opportunity. Yes, the USD/ZAR could certainly produce a reversal lower, but until there is a clear picture regarding a better outlook for the South African political spectrum, reversals lower may be seen as a chance to buy low and seek higher values.
The USD/ZAR is certainly within the higher realms of its mid-term range. The USD/ZAR has produced a solid amount of bearish sentiment since early March, but this has changed. The USD/ZAR was trading near a high of 15.55000 on the 8th of March. Traders who want to be buyers should keep their goals realistic and not aim for the moon. Resistance levels may appear vulnerable and worthy targets, but traders should look for incremental gains instead of a massive move. If the 14.85000 proves to be vulnerable more buying momentum could ensue.
Buying the USD/ZAR under the present conditions appears to be the right wager for speculators. Traders should expect volatility to run rampant in the short term and have all of their risk management working. Conservative traders may want to wait for slight reversals lower to buy the USD/ZAR and aim for quick take-profits. Aggressive traders may want to buy into the market now near the 14.76000 mark, use a cautious amount of leverage, a slightly wider than normal stop loss and aim for higher prices near current resistance levels.
South African Rand Short-Term Outlook:
Current Resistance: 14.85000
Current Support: 14.69000
High Target: 15.06000
Low Target: 14.56000
