USD/ZAR: Return to Normalcy Hoped for as Rand Tests Support

Robert Petrucci

The USD/ZAR has traded lower the past twelve hours after hitting a short-term high of 14.88000 yesterday, and the Forex pair is now challenging intriguing support levels.

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The USD/ZAR remains volatile as South Africa fights for narrative within the media as calm is sought after community and political unrest being expressed the past couple of weeks. The USD/ZAR did make a high of nearly 14.99000 on the 26th, on the 27th an apex of nearly 14.95500 was displayed and yesterday produced a high of nearly 14.88800. Intriguingly, all of those highs incrementally lowered the past few days as resistance began to show its teeth.

As of this writing, the USD/ZAR is trading near the 14.72000 juncture and this could prove important as an inflection point. Technically, the 14.68000 mark looks to be crucial support and below this the 14.66000 ratio could prove dynamic. The question for traders with bearish sentiment is if enough institutional traders will be willing to join ‘the party’ and sell the USD/ZAR under the present political conditions which South Africa is facing.

Technically, resistance levels have certainly decreased the past few days as rampant speculative buying has seemingly grown weaker.  It is conceivable that the USD/ZAR was overbought as financial houses and other large traders within the Forex pair sought temporary risk-averse positions. Having toyed with the 15.00000 mark only a few days ago within the USD/ZAR, this memory should not be erased by traders who want to pursue downward price action either.

From a risk/reward perspective, speculators who believe the USD/ZAR will struggle near its current support levels may be willing to be buyers and seek quick-hitting trades which seek nearby resistance as take profit targets. Buying the USD/ZAR near the 14.71000 to 14.70500 junctures and looking for slight reversals higher may prove to be worthwhile. Technically, the USD/ZAR may continue to produce rather choppy trading sessions within its current range as equilibrium is sought by institutional traders who may remain nervous.

Traders who are tempted to be sellers of the USD/ZAR cannot be faulted either. However, patience may prove to be an important ingredient for risk takers. If a speculator wants to wager on downside price action, they are encouraged to wait for the USD/ZAR to track a bit higher near current resistance around the 14.73000 to 14.74000 levels in order to place fast trades which look for reversals lower towards existing support.

South African Rand Short-Term Outlook:

Current Resistance: 14.73000

Current Support: 14.68000

High Target: 14.79500

Low Target: 14.66200

USD/ZAR

Robert Petrucci
Robert Petrucci has worked in the Forex, commodity, and financial profession since 1993. Important aspects of his work involve risk analysis and advisory services. As an advisor in a Family Office he maintains a conservative approach for wealth management and investments. Robert also works in private finance with investors and companies delivering financial and management services.

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