After reaching a low of nearly 14.21000 on the 4th of August and seemingly showing that the USD/ZAR wanted to challenge values seen before community unrest in South Africa became pronounced, the Forex pair reminded speculators they should never take results for granted. Late on the 5th of August, after the USD/ZAR had risen politely, the Forex pair suddenly produced a rocket shot higher and touched the 14.74000 juncture briefly. The emergence of a fireworks display within the USD/ZAR should not have been a complete surprise given the rather fragile sentiment surrounding the Forex pair.
As of this writing, the USD/ZAR is trading near the 14.64000 mark which is still within the higher realms of its short-term price range technically. The question speculators need to decide upon is if the sudden wave of buying action the past few days which has developed will fade off into the sunset and a bearish cycle will emerge? Or is the sudden shift to higher ground again in the USD/ZAR reflecting fundamentals in the Forex pair that are being expressed by institutional finance houses that have concerns regarding the mid- and long-term health of the South African rand?
However, traders can lean on the current technical charts and gauge their perceptions based on the past few weeks of trading. From the 22nd until the 29th of July, the USD/ZAR traded rather consistently above the 14.70000 mark. If the Forex pair does break the 14.70000 level higher and sustains a sense of bullish momentum, traders may be skeptical about how much further the Forex pair can traverse. Yes, a high of nearly 15.00000 was demonstrated on the 26th of July, but that may prove to be overbought territory.
The USD/ZAR remains difficult to wager on for traders and they need to be careful. Last week’s sudden reversal higher may have been a direct result of financial houses feeling that the 14.21000 region for the Forex pair was oversold, which could have sparked the buying momentum demonstrated. Thus, the price range for the USD/ZAR still remains rather wide, but the 14.70000 juncture may look like it is too high for some technical traders who perceive this level as selling territory.
South African Rand Short-Term Outlook:
Current Resistance: 14.69000
Current Support: 14.59000
High Target: 14.76000
Low Target: 14.48000
