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The USD/ZAR has stayed within the lower depths of its five day range and the consolidated price action may create speculative potential for traders.
The USD/ZAR opened its trading early this morning by testing lows again, but actually creating incrementally higher support via a short term technical perspective per its results. The USD/ZAR currency pair touched the 16.41560 ratio to start the day, put in a reversal higher, and then plunged lower again – but this time around only hit the 16.43650 vicinity approximately. As of this writing the USD/ZAR is trading near the 16.56500 mark with rather quick results.
Last Week’s Volatility Shows Signs of Consolidation, but Do Not be Fooled
Trading the last three days of the week produced rather dramatic reactions via the USD/ZAR as the currency pair was hit by dynamic shifts in behavioral sentiment. Except for all of its bluster and ability to trade lower, which brought the USD/ZAR to a low of nearly 16.39000 momentarily on 29th of July, the pair remains within the higher realms of its long term trading range. Yes, it has sold off and the lower part of its short term realms are being tested, but the USD/ZAR has not escaped the clutches of its bullish mode when a six month chart is examined.
Behavioral Sentiment Shift Geared towards Selling may Take Time to Build
Traders expected to capture selling momentum cannot be blamed, but the direction of the USD/ZAR may prove more complicated than a mere tumble downwards. The bullish trend of the USD/ZAR has been strong and support levels may prove more durable than anticipated by many. The USD/ZAR is not likely to accelerate to fresh lows instantaneously; it may have to happen via rather challenging choppy conditions. The consolidated range of the USD/ZAR should be tested carefully. Resistance levels near the 16.56000 to 16.58000 ratios should be watched. If they are broken higher, this will cause nervousness.
- If short term resistance levels near the 16.56000 to 16.58000 prove durable over the next couple of days this could be a bearish signal.
- Risk taking tactics while looking for downside momentum may prove worthwhile, but stop loss orders should be considered.
The near term for the USD/ZAR may produce more selling, but traders should not become overly ambitious. Â Plenty of risks are still lurking in the shadows regarding the global economic landscape, which could affect the USD/ZAR quickly and cause a buying trajectory to suddenly emerge. However, if Forex and other financial markets remain calm in the short term, selling the USD/ZAR could prove to be a solid wager, but as always it will carry risks.
USD/ZAR Short-Term Outlook
Current Resistance: 16.57100
Current Support: 16.51500
High Target: 16.65600
Low Target: 16.40500
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