The strength in the U.S. dollar against the South African rand looks to be weakening.
USD/ZAR hit an all-time high of 19.34 last Monday but wasn’t able to hold the 19.00 level and continued to fall the rest of the week. 👎
By Thursday, I saw that buying pressure had finally fizzled out and given that it was a holiday-shortened week (Holy Week), I exited near the end of the day at 18.0050.
What also concerned me about staying in this trade is the Fed. 😟
Currently, the Fed is doing all it can to prevent the U.S. dollar from rising.
This is dollar bearish. 🐻
In a nutshell, the Fed is promising the markets that there will be no shortage of U.S. dollars.
With the Fed going…buck wild (pun!), the dollar could continue to weaken, especially as fears over the coronavirus pandemic ease.
So if that’s the case, the odds of USD/ZAR reaching 20 now seems low so I’d rather harvest the profits I’ve got before the rand possibly strengthens any further.
My original entry price was at 16.55000 and my exit was 18.0050.
The result is a profit of 14,550 pips or an 8.79% gain. 💰
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