The USD/ZAR remains within the bearish range it has accomplished in a significant manner the past few months. However, early today, when Forex markets opened, the USD/ZAR saw a rather strong surge higher and important short-term resistance levels are within target. Speculators may be wondering why the sudden spike occurred this morning and what the reason is for the upward movement.
My own conjecture suspects that the sudden reversal higher displayed early may have occurred on news which seems to indicate that South Africa, along with the UK, has evidence that the newly found mutated coronavirus may be within the nation. It is possible that this news, which is starting to circulate, caused some dismay and put early pressure on the South African rand via buying positions of the USD/ZAR. Germany is said to be contemplating a travel ban on the UK and South Africa in reports this morning.
However, it should not be forgotten that the USD/ZAR has accomplished a solid bearish trend. After trading near highs of 17.18000 in late September, the Forex pair is now trading near 14.75000 as of this writing. Support levels have proven vulnerable and downward price action has been strong and often fast for the USD/ZAR in the past few months.
The question is if the brief surge early today has been fully digested in the USD/ZAR or if further buying may ensue. Speculators should watch the resistance juncture of 14.81000 carefully to see if the mark can prove adequate. If news reports regarding the new strain of coronavirus proves true it may continue to cause some short-term volatility within the USD/ZAR, but will it be enough to ruin the bearish trend of the Forex pair?
The long-term downward movement of the USD/ZAR has not happened in a vacuum. Coronavirus implications continue to plague many nations, but the South African rand, like many other emerging market currencies, have done well since March of this year against the USD. Speculators may prove wise to look at technical charts and suspect that the strong bearish trend within the USD/ZAR may continue to prove capable.
Choppy conditions may prevail today for the USD/ZAR if news develops regarding the newly found mutation of coronavirus, but selling the Forex pair when resistance levels are hit with limit orders to pursue more downward momentum may prove to be the correct choice. The USD/ZAR could prove volatile today and traders need to remain alert.
South African Rand Short-Term Outlook:
- Current Resistance: 14.81000
- Current Support: 14.64000
- High Target: 14.89000
- Low Target: 14.58000
