The USD/ZAR may be the most interesting forex pair in the world today. After enjoying a solid bearish trend the past month the South African Rand has seen a reversal emerge as the US Dollar has been bought. This sudden bullish trend has taken place as gold patrols record high levels and shows little inclination to produce a decline in value. Intriguingly, the USD/ZAR has demonstrated an ability to consolidate the past two days. Yes, it has continued to touch important resistance, but a volatile buying surge seems to be unlikely for the USD/ZAR.
Speculators should look at the USD/ZAR carefully. It is possible that the consolidation within it current value range of 17.25000 to 17.45000 indicates a breakout may occur sooner rather than later. Traders cannot be faulted for believing if a certain burst of impetus develops that it will be a downward bearish trend that reemerges for the USD/ZAR.
Yes, South Africa faces coronavirus implications, its government is not the most transparent in the world and its economic situation is challenging. However, buying of the USD/ZAR in recent days may be running out of steam and speculators may be inclined to test its waters in its current trading range. If the USD/ZAR is able to maintain its current value range and not surpass the 17.45000 resistance mark, selling the forex pair now with an adequate stop-loss order in place may prove worthwhile.
Support near the 17.25000 juncture could prove a worthwhile target today and tomorrow for short-sellers. Traders cannot be faulted for believing if this support level is broken downward that lower marks which were tested in the recent past will come into focus again. Perhaps, the forex market is delivering a warning sign, maybe the South African Rand should not be this strong under the present conditions which carry the concerns of coronavirus and its economic implications in the nation, but risk appetite which remains optimistic globally and the strong price of gold does provide a counterbalance to these worries.
The USD/ZAR is challenging important resistance early this morning, but speculators who believe that a reversal will develop in the short term cannot be faulted. Selling the USD/ZAR within its current price range could prove worthwhile.
South African Rand Short Term Outlook:
Current Resistance: 17.45000
Current Support: 17.25000
High Target: 17.55000
Low Target: 17.15000
