On the 19th of August the USD/ZAR powered through the 15.00000 level and has not looked backwards. The move higher on Thursday was followed with additional buying before going into the weekend. A high of nearly 15.40000 was attained on Friday and while the USD/ZAR has come off the high water mark, it remains rather loftily positioned in early trading today. The current price of the USD/ZAR as of this writing is near the 14.27000 juncture.
Traders who have wagered against the upwards momentum of the USD/ZAR have likely suffered stark losses within their accounts the past few days. The trend of the USD/ZAR is clear, and until a strong and swift amount of selling comes into the picture via financial institutions, there is evidence the Forex pair may have additional room to roam higher.
The last time the USD/ZAR traversed its current value range was in early March of 2020. On the 8th of March, the USD/ZAR was trading near a high of 15.56000 before a strong selloff developed and eventually took the forex pair to a low of nearly 13.36000 on the 4th of June. A six-month chart must be pulled out to see the two major trends the USD/ZAR has produced since March. However, the high water marks touched in early March are not a warning sign that sudden selling momentum is about to ensue because of the highs now being attained.
In January of this year, the USD/ZAR traded within sight of the 15.60000 level. Prior to this, the last time the USD/ZAR traded within these types of highs and sustained its value was in November of 2020. Before that - and this is meant to be an alarmist warning - the USD/ZAR was trading near 16.50000 in late October of 2020.
Technically, traders may believe that a move higher which could challenge these types of higher ratios should be looked at with disdain. But traders should ask where the greatest amount of potential resides based on the current economic and political situation now engulfing South Africa.
Bullish traders should not get overly ambitious. Buyers of the USD/ZAR who continue to pursue the upwards momentum within the Forex pair should cash out winning positions if they accumulate. Risk reward scenarios continue to point towards potentially stronger highs compared to reversals lower which may run into support rather quickly.
South African Rand Short-Term Outlook:
Current Resistance: 15.32500
Current Support: 15.23000
High Target: 15.43000
Low Target: 15.17000
