The USD/ZAR has seen a slight reversal higher the past day of trading as resistance levels have been tested. However, trading has been choppy, and conditions have certainly not crushed the existing bearish trend within which the South African rand remains. The current price vicinity of 14.67000 is comfortably below yesterday’s high of approximately 14.73000. The fact that the move upwards yesterday didn’t crush the short-term bearish trend is also intriguing and opens the door for speculators who believe additional downside movement will ensue.
Because of rather light holiday trading volumes, establishing a significant price trend short term may remain rather difficult. This creates the potential for traders to take advantage of the rather choppy waters that could ensue near term and seek reversals while keeping in mind that the bearish trend of the USD/ZAR remains a dominant feature until proven otherwise.
The USD/ZAR looks highly valued within its current price vicinity and speculators may believe that the 14.55000 target is appealing as a take-profit juncture. Traders participating in Forex during the holiday season need to be ready for quick trades. Anticipating larger moves when trading volumes are light can prove frustrating. Having risk management in place is always important, but knowing when to grab profits and not be too greedy in light Forex markets is equally important.
The downward price action of the USD/ZAR has been overwhelming since November. Support levels have proven vulnerable and have been brushed aside easily. While the bearish trend certainly remains evident, traders should not expect the fast results they have experienced the past two months. The USD/ZAR may remain relatively quiet near term, which means speculators will want to look for cyclical reversals taking place during the day and look to take advantage of the price fluctuations.
Because there is a perception that the bearish trend remains strong, risk/reward scenarios certainly lean towards selling the USD/ZAR when possible. If the USD/ZAR can sustain its current values and remain comfortably below its current resistance level of 14.72000, traders may be inclined to sell the Forex pair and seek downward momentum for quick-hitting trades.
South African Rand Short-Term Outlook:
- Current Resistance: 14.72000
- Current Support: 14.60000
- High Target: 14.84000
- Low Target: 14.53000
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