Even as the South African Rand has shown the ability to remain within the lower elements of its price realm within the USD/ZAR, displays of choppy conditions prevail. The USD/ZAR is correlating to the broad Forex market in a healthy fashion. And the Rand’s rather distinctive bearish ability within the USD/ZAR continues to be displayed on occasion, but reversals remain constant.
The word ‘occasion’ that should make day traders cautious. On Friday the USD/ZAR pushed below the 16.14000 vicinity briefly, but then a reversal higher occurred and the currency pair went into the weekend near 16.29800. Upon opening this morning the USD/ZAR has jumped higher, this as global financial institutions have exhibited signs of nervousness and is currently near 16.33800 with fast conditions.
Lack of Short and Near-Term Clarity Clash with Mid-Term Outlooks
The ability of the USD/ZAR to continue to challenge lows has been apparent since the 8th of April, the 16.30000 ratio has been a consistent battleground. Some lower moves have occurred which have been followed with reversals higher. Speculators trying to ride momentum need to understand that sentiment is shifting quickly. The anxious behavior of financial institutions correlates to global risk appetite and adverse winds which are swirling.
Mid-term outlook among financial institutions in South Africa likely remain somewhat optimistic, this as large players probably believe the USD/ZAR could touch lower ground eventually. However, a lot can change in a few months. And the potential escalation of military action in the Iranian war are certainly causing some headwinds this morning. The ceasefire between the U.S and Iran is set to expire soon and an extension of the ceasefire is in question, this as conflicting reports emerge.
Speculative Trading in the USD/ZAR
Whie a range between the 16.30000 and 16.45000 are rather easy to detect via technical charts from the past week and a half of trading, speculators cannot count on this realm to hold. Choppy conditions though may allow day traders to gamble on limited moves within the range.
The problem with betting on reversals via support and resistance levels for the moment is the added consideration of having to monitor news developments from the Middle East.
If the Iranian ceasefire were to fail and military escalation start again, then a reaction with stronger buying of the USD/ZAR could happen.
The problem speculators and large players are having is trying to figure out what will happen next.
Thus, quick hitting trades choosing a direction based on perceptions may be the best way to pursue the USD/ZAR.
USD/ZAR Short Term Outlook:
Current Resistance: 16.38800
Current Support: 16.32900
High Target: 16.48900
Low Target: 16.30010