The 15.00000 mark was broken lower late yesterday via the USD/ZAR and its current value is sustaining the bearish trend. After testing support levels the past couple of weeks with a regular display of slight reversals upwards, the USD/ZAR demonstrated yesterday that bearish momentum remains the driving force within the Forex pair.
Speculators should have their eyes on the 14.90000 support mark now and, if the USD/ZAR is able to challenge this level, it could set off an additional wave of downward momentum. However, the trend of the USD/ZAR is unlikely to be a one-way avenue and traders need to be aware of the potential for reversals to emerge short term. As of this writing, the USD/ZAR is testing the 14.96000 juncture and, importantly, in early trading this morning, the South African rand has shown the capability to stay beneath the 15.00000 in a sustained manner.
Speculators who feel the USD/ZAR has seen too much bearish momentum displayed should look at a long-term chart and notice that the Forex pair is now entering a value range it comfortably held before the onset of the coronavirus pandemic. The USD/ZAR may be able to reestablish its lower value range and traverse those waters as long as global risk appetite remains optimistic. While there are no doubts the South African government faces challenges ahead fiscally, the notion of a vaccine on the horizon which can stem the effects of coronavirus may be creating additional positive value for the rand.
Technically, the USD/ZAR has enjoyed a solid trend downwards and the question is if the USD/ZAR has further room to maintain its current pace. Short term, the USD/ZAR may face a test of its current price vicinity, but if the 15.00000 is sustained as resistance, the Forex pair could produce another leg down. Near term, the USD/ZAR is likely to face a test or two of its current values because it is likely that programmed trading via financial institutions have the 14.90000 to 14.95000 support levels coded mathematically which could spark small reversals higher.
Speculative traders should use limit orders within the USD/ZAR and they may want to continue to pursue downward momentum. Short term, the Forex pair may prove choppy, but if resistance levels prove adequate, the USD/ZAR may have the ability to create additional downside momentum for traders to find an advantage.
South African Rand Short-Term Outlook:
- Current Resistance: 15.05000
- Current Support: 14.90000
- High Target: 15.12000
- Low Target: 14.76000
