The USD/ZAR has traded within a tight value band the past couple of days after seeing its bearish trend gain impetus early this week. In early trading this morning the USD/ZAR has seen some buying emerge and short term resistance levels are being tested. The mark of 17.00000 will get plenty of attention and may be a vital inflection point for speculators to consider if it is broken higher.
The South African Rand has produced challenging trading conditions the past month and has shown the ability to create awkward trends. The month of August saw the USD/ZAR begin trading slightly above the 17.0000 price level. On the 10th of August, the forex pair hit a high watermark of 17.77800, but then resumed its bearish behavior. The selling of the USD/ZAR after the bullish trend was unable to sustain itself and now finds the forex pair slightly below the 17.0000 level after this week’s emergence of bearish sentiment.
In the meantime, the value of gold the past month has also seen challenging conditions. After reaching all-time highs, the precious metal is now maintaining what appears to be a consolidated price range as it waits for its next impetus. The correlation between the South African Rand and gold can be difficult when examined short term.
The South African Rand has performed well against the US Dollar the past two and half weeks, but the USD/ZAR has not been able to sustain a trend that is easy to forecast short term. However, this may actually give speculators an advantage. Support and resistance levels have proven vulnerable and choppy conditions will persist, which means traders who use limit orders and have the stamina to let their positions transact may find the best results. Patience will prove to be important.
Speculators may be tempted to buy the USD/ZAR short term and look for upside price action. Yes, the USD/ZAR has experienced a mid-term bearish trend, but it has not been particularly convincing and support levels when challenged have produced solid reversals higher. Buying the USD/ZAR within the price vicinity between 16.88000 and 16.93000 could prove enticing if bullish sentiment is generated near term. The rather calm sideways trading within the USD/ZAR looks like an opportunity for traders who have a speculative impulse.
South African Rand Short Term Outlook:
Current Resistance: 17.00000
Current Support: 16.80000
High Target: 17.20000
Low Target: 16.70000
