As of this writing, the USD/ZAR is trading slightly above important short-term resistance levels seen for a predominate amount of yesterday’s trading. The current value just under the 14.85000 juncture could prove to be important. Intriguingly, the USD/ZAR was able to maintain its higher value range yesterday and has also demonstrated the same early today. If this trend continues to hold and values are sustained within the current technical scope without suffering a decisive reversal lower, this could be a signal that additional momentum higher can be found.
It may be tempting to argue against the current trend and proclaim that the USD/ZAR has been overbought, taking into consideration technical perspectives and the rather impressive bearish trajectory the Forex pair has displayed long term. Traders need to adjust their thinking and reconsider their perceptions, particularly when the short-term and in fact the mid-term price action have produced a steady stream of contrary evidence. Stubborn traders who persist in the thought that they are right and the market is wrong often find that their trading accounts are laid to waste.
A simple look at a one-month chart shows the USD/ZAR was trading above its current price levels from the 23rd until the 28th of July. While the street violence due to community unrest has grown calmer and media coverage internationally is not focused on the discontent in South Africa, concerns still continue to remain within the nation.
Technical traders need to be able to at a minimum keep the notion of fundamental cause and effect within their mindsets. Yes, the USD/ZAR is near important resistance and a downturn can certainly be exhibited leaving the door open for speculators who have the ability to pursue their perceptions.
If a trader is tempted to sell the USD/ZAR at its current price levels, they should use resistance levels perched slightly higher near the 14.87000 juncture as stop loss protection. Because if the 14.87000 juncture is toppled, it could mean bullish speculators and financial houses are setting the table for the USD/ZAR to challenge highs above the 14.90000 junctures again.
The USD/ZAR is within a sincerely speculative territory as it traverses slightly under its values seen in late July. Trying to sell the Forex pair if new highs are tested might seem like a solid speculative notion, but it would also be a risky bet going against the trend.
South African Rand Short-Term Outlook:
Current Resistance: 14.86900
Current Support: 14.78800
High Target: 14.95000
Low Target: 14.69900
