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The past week of trading in the USD/ZAR has been able to demonstrate a remarkable amount of bearish momentum, now important support levels are in sight.
As of this writing the USD/ZAR is near the 18.73500 level with fast price changes being exhibited. This morning’s low as trading has begun has managed thus far, to hold onto the lows produced last Friday before going into the weekend technically. The USD/ZAR is also trading at one month lows and the last time the currency pair has traversed its current value was on the 10th of May.
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Having achieved a solid bearish trend since the 1st of June, when the USD/ZAR hit a high of 19.92000 momentarily is a good outcome. The USD/ZAR has been able to show a correlation to many major currency pairs teamed against the USD also, which is a healthy financial signal for the South African Rand. However, before victory parades are started for the USD/ZAR traders may want to take a moment to be cautious and consider the potential of things to come.
If the USD/ZAR is able to build on its bearish momentum, there is a considerable amount of technical support around the 18.60000 level. The level of 18.70000 is rather close now, and if it is broken lower technical charts via a three month glance suggest price velocity could build until the 18.60000 value is approached. Yet, there are concerns too and while technical ambitions are reasonable, a large amount of nervous sentiment still shadows the USD/ZAR because of economic concerns in South Africa.
Fighting against the trend is never an easy thing to do and it can often become an expensive penalty for being stubborn. The USD/ZAR has certainly produced a rather surprising move lower, and its ability to sustain values beneath what could have been interpreted as important psychological support levels last week near the 19.00000 mark is important. Last Wednesday when the USD/ZAR challenged the 19.00000 level a slight reversal upwards was produced, but when the 19.00000 was hit again on Thursday the currency pair penetrated the value with strong price velocity downwards.
- The lower move in the USD/ZAR has been solid, but critical support levels are slightly below the current values the currency pair is trading.
- Important Consumer Price Index data from the U.S. tomorrow is coming, and this will make Forex potentially nervous ahead of Wednesday’s Federal Reserve pronouncements.
- Behavioral sentiment may appear more optimistic in the USD/ZAR momentarily via the downward trend, but traders need to have risk management ready for potential volatility which is likely over the next few days.
Current Resistance: 18.75590
Current Support: 18.71100
High Target: 18.80610
Low Target: 18.64870
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