A quick lower move to the 16.61700 vicinity this morning disappeared faster than it could be traded, a handful of hours later and the USD/ZAR is near the 16.70000 ratio within holiday Forex conditions.
The USD/ZAR is near the important 16.70000 ratio as of this writing in Forex markets that are seeing very thin volume. Upon opening this morning the USD/ZAR retested depths seen last week when the 16.61700 vicinity was traversed. However, this mark lasted only a moment and reactionary orders reversed momentum back to a realm that has seen plenty of price action since the 17th of December.
Day traders who choose to pursue the USD/ZAR today and tomorrow need to know they are operating in a marketplace that will have wide spreads via bids and asks, and one in which an order will be executed in a possibly ugly manner. Meaning entry price orders must be used so the speculator doesn’t pass out from shock when they see their ‘bad’ fills. Trading today and tomorrow is possible yes, but risk taking tactics must be observed.
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Holiday Trading and the USD/ZAR
The South African Rand is getting plenty of attention the past few months as it has become one of the darlings of the emerging market sphere. The USD/ZAR has demonstrated a solid bearish capability, and Forex traders looking for opportunities via technical trends have sometimes been rewards handsomely. Yet, trying to pursue the USD/ZAR in holiday conditions which will only see lighter volumes emerge in the coming days could prove difficult.
Although there may be some rather light trading on Wednesday, speculators need to understand financial institutions will largely vanish from Forex in the coming day and a half. Yes, some trading will also occur on Friday, but because of an absence of large institutions and lack of corporate cash being put into the marketplace, the USD/ZAR could become vulnerable to imbalanced orders.
The 16.70000 and Price Equilibrium
It is likely the USD/ZAR may see the 16.70000 act as a resistance buffer over the next handful of days, that is if financial institutions can protect their intentions and outlooks.
- The 16.70000 has acted like a magnet over the past ten days of trading and this might not change.
- In fact, downside pressure may be seen, but traders should not get overly ambitious during the holiday season and be willing to cash our winning bets when they are accomplished.
- Perhaps selling the USD/ZAR when it hits perceived technical resistance will work best in the coming days, but again, the absence of big institutions involved in the USD/ZAR could allow for rather uncomfortable tests of values that seem illogical over the next handful of days via reversals.
USD/ZAR Short Term Outlook:
Current Resistance: 16.70400
Current Support: 16.67900
High Target: 16.72100
Low Target: 16.64600
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