The USD/ZAR has delivered traders a rather impressive range the past handful of days reminding all speculators that volatility can deliver joy and pain.
The USD/ZAR is trading as of this writing near the 14.90000 level. Value remains within sight of the upper range for the Forex pair, and speculators who have been trading the USD/ZAR the past handful of days may be enticed while looking at technical charts. The volatility delivered by the USD/ZAR has created a broad range and likely produced rather solid results for some speculators, while making others suffer.
Patience and the use of conservative leverage are fundamental keys while trading. The ability of the USD/ZAR to reach a height of 15.25000 on the 30th of September and then produce a reversal lower on the 1st of October may have caught some traders by surprise, but global market conditions have been fragile and choppy results have been widespread. A low of about 14.83000 was registered early this morning in the USD/ZAR but a slight move up has transpired since then.
The USD/ZAR should be expected to exhibit additional volatility short term. The question speculators should consider is where the greatest amount of risk and reward potentially awaits. The trend of the USD/ZAR has been rather bullish. Even though the reversal from the high achieved late last week was strong, it didn’t break below important support ratios, and the USD/ZAR does remain within plain sight of the important 15.00000 juncture.
While traders should prepare for the possibility of more fast conditions it appears the greatest potential for a big move may be to the upside. If current support which is close by around the 14.86000 level can hold, and the USD/ZAR actually sustains its price above the 14.90000 level short term, this may indicate consolidation will lead to another leg up sooner rather than later.
Stop loss orders should be working at all times in the present environment. If a trader can use a cautious amount of leverage, this will also allow for a wider stop loss to be implemented which may allow for a trade to favorably develop in the chosen direction. If current support levels are maintained, there is reason to suspect the 14.95000 level could become vulnerable as resistance and that targeted buying could aim for the 15.00000 and higher once again.
South African Rand Short-Term Outlook
Current Resistance: 14.97000
Current Support: 14.85000
High Target: 15.14000
Low Target: 14.78000