The USD/ZAR took an express train downwards yesterday and quickly reaffirmed that its bearish trend remains intact. The fast move lower should not have come as a surprise to traders who have been pursuing the bearish trend of the USD/ZAR. The destination reached yesterday hit low water marks not seen since the 25th of February. What should intrigue short-term traders is the knowledge that the USD/ZAR has challenged even lower values in the past three months.
However, after touching lower values in December, January and February, the USD/ZAR has had a difficult time to sustain momentum downward and push through support junctures of 14.59000 to 14.40000 consistently enough to create a sustained value range within those parameters. Speculators may be correct if they are looking at the current technical bearish achievements of the USD/ZAR and believe they should now plan for a reversal higher. This thinking cannot be faulted, except to say they should be concerned this time may prove the charm and the bearish trend could suddenly become unrelenting and an opportunity may be wasted.
After yesterday’s big move downwards, the USD/ZAR has begun to trade within a short consolidated manner and produce a testing ground as it tries to create a sustained value band. Intriguingly, the 14.41000 level is tantalizingly close for bearish speculators who can see via a glance at technical prices early in 2020 that this juncture remains an important inflection point.
However, before speculators eye targets below this mark, the USD/ZAR should first accomplish a breakthrough and show an ability to sustain momentum. Up until now that has not happened, so traders should remain suspicious and instead continue to pursue quick trades.
The long-term trend of the USD/ZAR has certainly been bearish, but the past month-and-a-half of trading has also produced moves higher which have tested the stamina of traders followed by predictable bearish action. Selling the USD/ZAR remains the likely favored position for most traders as they tend to believe that downside action has the greater chance to see a bigger move. However, until lower support levels are broken, traders should be patient and wait for small climbs higher in value and then launch selling positions via limit orders.
South African Rand Short-Term Outlook:
Current Resistance: 14.83000
Current Support: 14.63000
High Target: 14.96000
Low Target: 14.52000
