The USD/ZAR is traversing near the 16.14000 level as of this writing, but trading conditions are fast. The past month-and-a-half of trading has produced a bullish winning streak for the USD/ZAR, but last week’s late news before going into the weekend regarding the new strain of coronavirus called Omicron has poured fuel onto upwards momentum and helped crush resistance.
The USD/ZAR is trading near values not seen since early November 2020, this as the South African Rand recovered a massive loss of value experienced from late February 2020 until then, when the first implications of coronavirus had a massive effect economically. Speculators, who experienced trading during the frenzy of those early days, when coronavirus was making news for the first time, need to remember the volatility which occurred throughout forex. Traders also need to be able to shut out a lot of the noise and decide which news is valid, and which news they are listening to is simply shouting.
The USD/ZAR appears to have some potential resistance near the 16.20000 level, but before going into the weekend, a height of 16.35000 was touched. Stop losses and take profits should be a fundamental part of all trading in the near term as potential developments shake the Forex market. The USD/ZAR did experience higher values in 2020, but traders need to stay realistic and not become overly ambitious. The question that needs to be answered is what the short-term and mid-term implications of the fear throughout Forex will generate.
Traders who are contrarian and skeptical of the bullish move and believe technically the USD/ZAR has been overbought will be fighting against a magnified trend. Short-term support looks to be the 16.09000 vicinity and if this proves vulnerable the 16.05000 mark could become a target. However, traders looking to take advantage of downside reversals developing may not want to speculate too long and grab profits when they develop.
Short-term conditions in the USD/ZAR could prove to be a dynamic market near term. The fact that South Africa is a focus point regarding Omicron could have an impact near term, but eventually that noise should fade. Short-term speculators may prove wise to wager with buying positions when the USD/ZAR reverses slightly lower and ignite their buying positions which seek higher price levels which challenge current resistance near term.
South African Rand Short-Term Outlook
Current Resistance: 16.20000
Current Support: 16.09000
High Target: 16.39000
Low Target: 16.01000
