The USD/ZAR is trading below its apex highs achieved on the 5th of September when a summit of 17.42200 was briefly challenged. Although the USD/ZAR currency pair has ‘fallen’ to a value around 17.34200 for the time being, this is not a battle cry for bearish traders to position their wagers for extreme downward movements. The USD/ZAR remains comfortably above the 17.00000 level, and the outlook remains difficult for the South African Rand and a host of other emerging market currencies.
Important Resistance is within Sight and if Challenged could start another Storm Upwards
Global financial markets remain skittish at best and the USD/ZAR is not being helped by the shaky behavioral sentiment being generated. Support ratios near the 17.31000 to 17.29000 marks should be watched and if they prove to be durable in the near term, this could be another sign that an additional leg upwards is a possibility.
Bearish speculators who believe the USD/ZAR has been overbought certainly have some foundation in their statements, but in reality the Forex pair has achieved highs like this before. Bearish skeptics will say the highs achieved in 2020 when coronavirus was ‘rocking’ the financial world are out of reach, but highs seen only two days ago flirted with marks seen in August of 2020.
No, it is unlikely bullish traders can achieve marks of 19.00000 seen in March of 2020. But are levels that challenge 18.00000 sincerely a hill too tough to climb? Traders should look at long term charts and acknowledge the value of the USD/ZAR was near 17.80000 in December 2015. In other words it has not only been coronavirus that has sparked bullish moves in the USD/ZAR before.
Bullish Speculators need to be Realistic and reach for Legitimate Goals with the USD/ZAR
- The USD/ZAR remains in a steady incremental bullish trend and if support levels can be maintained, they can be used as potential igniting ground for conservative traders to buy.
- Financial markets are nervous and this has helped spark additional USD/ZAR upward moves.
Reversals lower will occur, this is a natural part of Forex trading and the USD/ZAR is not immune to natural trading cycles. However if global financial institutions remain fragile, they may continue to seek buying positions of the USD/ZAR.
Higher moves are not out of the question for the USD/ZAR and a retest of values seen only two days ago could be demonstrated in the near term. Traders need to use risk management and not over leverage their positions. Traders who aim for realistic target near the 17.35000 to 17.39000 ratios cannot be blamed.
USD/ZAR Short Term Outlook:
Current Resistance: 17.38200
Current Support: 17.30700
High Target: 17.44900
Low Target: 17.25500
Ready to trade our Forex forecast? Here’s a list of some of the best Forex trading platforms to check out.