As the USD/ZAR trades near the 18.80200 ratio as of this writing, speculators who participated in the currency pair last week are questioning where momentum will develop. Following the New Year’s holiday the USD/ZAR began its trading near the 18.36400 vicinity, but then began to experience a surge of bullish activity. A high was hit on Friday in the wake of the U.S jobs numbers when the 18.95700 level was momentarily touched, only to see a rapid move lower towards 18.58500 within the span of a couple of hours. However, much of the results seen last week can be considered suspect.
Traders who decided not to participate in wagering on the USD/ZAR over the holidays and are looking at technical charts to interpret price action will likely want to pull out a one month chart. Before the Christmas holiday ensued the USD/ZAR was trading at lower values, but occasional tests higher were seen. The question all traders of the USD/ZAR need to consider now is if the recent price action in the currency pair represents fair market value.
Return of Full Volumes in the USD/ZAR
Early trading this morning has seen a slight climb demonstrated and the 18.80000 may prove to be an interesting testing ground. If prices begin to sustain below the 18.80000 mark this could indicate financial institutions, which are returning to their desks after the long holiday period, may believe the USD/ZAR is overbought within its current realm. Today and tomorrow will prove intriguing for speculators, this as prices action develops technically as full volumes return to Forex.
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The current price of the USD/ZAR does seem overbought taking into consideration where the USD/ZAR was trading before the holiday season was delivered. Risk appetite has not changed significantly and most analysts remain convinced the U.S Federal Reserve will have to take on a softer monetary policy in the months to come. However, short-term behavioral sentiment will want to see tranquil conditions the next couple of days.
Speculative USD/ZAR Range in the Near-Term
- The ability of the USD/ZAR to move higher has correlated with many other major forex pairs over the past week. Trading today will likely be technically inclined as financial institutions monitor support and resistance levels carefully.
- The USD/ZAR certainly experienced a fast rise upwards last week, but this occurred when light trading volumes were in effect. Conditions over the next couple of days will affect sentiment and resistance near the 18.8200 to 18.85000 levels should be watched.
- If the USD/ZAR sustains some momentum lower early this week, support levels near the 18.75000 to 18.73000 ratios could become targeted.
USD/ZAR Short Term Outlook:
Current Resistance: 18.82100
Current Support: 18.79600
High Target: 18.84600
Low Target: 18.73900