Early morning trading in the USD/ZAR has seen a sliver of buying come into the market and the short-term move upward should not be too surprising.
The USD/ZAR continues to linger within the lower depths of its mid-term price range having accomplished a bearish trend the past four weeks.
The USD/ZAR is near the 17.16000 realm as of this writing. On Wednesday of last week, the USD/ZAR was trading near the 17.27000 ratio when a storm of selling took place and eventually had the currency pair around the 16.92000 mark on Thursday. However, before going into the weekend a solid amount of buying took place and the USD/ZAR was above 17.00000 again but the volume was rather thin.
What Goes Down Strongly Frequently Reverses Upwards Momentarily
Early morning trading in the USD/ZAR has seen a sliver of buying come into the market and the short-term move upward should not be too surprising. Having accomplished a definite selloff since early November when the USD/ZAR was trading near the 18.52000 level, the notion that the 17.00000 value is now a psychological inflection point for speculators is noteworthy.
The reaction higher early today is also likely due to the acknowledgment the USD/ZAR had a very solid downward price velocity on Wednesday. Trading volume was beginning to become thin as the U.S Thanksgiving holiday approached, and with the absence of U.S traders on Thursday and many missing on Friday, financial houses may be skeptical about price equilibrium as the week starts.
17.00000 Level may be a Target but is it Overly Ambitious?
Having seen the USD/ZAR break below the 17.00000 on Thursday of last week when financial houses realized their belief the U.S Federal Reserve had proven their perception that interest rate hike policy would likely change was important. The rise back above this value however shows the South African Rand has many challenges of its own. The South African economy is still being mismanaged and suffering from a serious amount of corruption. The move lower in the USD/ZAR is largely based on the weakened USD.
Traders looking to pursue selling positions of the USD/ZAR should be careful in the short term. Speculators might want to use upwards movement towards resistance to then ignite selling orders and aim for realistic support targets as taking profit goals.
Wagering on the 17.00000 as a downward target may prove interesting in the near term, but it may also be a road too far for day traders. Betting on closer targets potentially near the 17.120000 to 17.10000 in the short term for quick-hitting trades and potential profits may prove worthwhile.
The downward track of the USD/ZAR is technically mirroring the broad Forex market. Traders tempted to continue testing downwards momentum should not be over-leveraged and have patience. Today and tomorrow may prove volatile as U.S traders return from their long holiday weekend and reactions occur to prices that still may need to be tested by larger trading volumes.
USD/ZAR Short-Term Outlook:
Current Resistance: 17.17100
Current Support: 17.12700
High Target: 17.26200
Low Target: 16.97100