The precious metal has gained significantly early this week. However, if you are trading the South African Rand as a speculator right now and are not looking at the value of gold you are likely on another planet regarding your perception of the universe. The USD/ZAR has experienced more selling and its bearish trend remains intact as gold climbs to new highs within a brisk trading environment. They use the expression ‘off the chain’ in Texas, which means something is dangerous, and gold is ‘off the chain’ currently.
What was considered important support yesterday between 16.50000 and 16.55000 now actually may be crucial short term resistance as of this morning. Technical traders can see the USD/ZAR touched its current values on the 10th of June, but this time feels different. When values of 16.45000 were seen on the 10th of June a quick bullish reversal ensued. In fact, on the 11th of June the South African Rand was trading above 17.20000 again.
However, trading sentiment has changed since June. South Africa continues to face hurdles regarding coronavirus and its impact economically domestically is problematic. Risk appetite globally however has continued to be steady and actually increased, and then there is the major ingredient regarding the value of gold and its outlook. There are no certainties and analysts are frequently wrong, including me, but large groups of financial institutions are treating gold as a safe haven. And just in case you do not know, South Africa is a major producer of gold.
The USD/ZAR has not traded in a steady range per its current values since March, when coronavirus news began to affect nations and their economies. Technical support should be considered near the 16.38000 level, but this may prove very short term. Speculators may target the 16.35000 juncture, but this would need additional selling strength.
Can you look for upside reversals from the USD/ZAR? Yes, you could but this would be an extraordinary speculative short term trade, it appears resistance near the 16.50000 and 16.55000 could be hard to attain. Because It may be better to use those values as stop-loss ratios and see how much more downside the bearish trend of the USD/ZAR can muster.
South African Rand Short Term Outlook:
Current Resistance: 16.50000
Current Support: 16.38000
High Target: 16.60000
Low Target: 16.30000
