The USD/ZAR has continued to see volatile trading the past week, but importantly the forex pair has trended higher as bullish momentum continues to express strength. Short term weakness in the South African Rand has been evident as it has reversed higher, this after trying to challenge support levels which appear to be also increasing incrementally.
Speculators will have to determine if the trading within the USD/ZAR is a short-term cycle as global risk appetite remains cautious, or it the sudden higher values represent a new and longer trend for the South African Rand which will become dominant. Global equity indices have rebounded the past two days of trading, but skeptics remain within the marketplace and a cautious approach has been expressed in forex as many emerging market currencies have skidded the past few sessions against the US Dollar.
Long term it is likely the US Dollar may lose additional value, but short-term traders want to know what is going to happen within the next two days. As of this morning, the USD/ZAR is trading near important resistance and if the forex pair continues to puncture vulnerable values higher, the targets of 17.23000 and 17.34000 should be watched carefully.
The level of 17.00000 proved easy to puncture higher the middle of last week and this inflection point did produce volatility. However, after establishing sustained trading above the 17.0000 juncture the USD/ZAR has traded higher and shown an inability short term to challenge the 17.0000 level below. For speculators who believe a bearish move will redevelop near term, they should watch the 17.05000 support mark carefully.
A short term bullish trend has been established within the USD/ZAR and this should be no surprise to speculators. After testing critical support levels near the 16.20000 to 16.00000 marks only ten days ago, the forex pair has shown that the South African Rand was considered overvalued as consistent buying has ensued.
Global risk sentiment is a key ingredient within the USD/ZAR. If equity indices remain mixed and the price of gold continues to remain within its lower short term values, the USD/ZAR may continue to attract buyers as speculators continue to look for additional tests of resistance levels above.
South African Rand Short Term Outlook:
Current Resistance: 17.23000
Current Support: 17.05000
High Target: 17.35000
Low Target: 16.80000
