The USD/ZAR is trading within the lower realms of its near-term technical charts as financial institutions globally seem to be waiting for the potential of more USD weakness, followed by reversals higher.
The USD/ZAR touched the 17.66930 vicinity in fast trading, as of this morning’s writing the currency pair is around 17.74950 with fast fluctuations evident. The spread in the USD/ZAR appears to be wide this morning, allowing financial institutions to play it safe as price action remains quick and tomorrow’s U.S Consumer Price Index data is anticipated. The USD has produced choppy results in the broad Forex market the past week, but an inclination to remain within its weaker boundaries against major currencies is being demonstrated.
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The ability of the USD/ZAR to traverse and maintain its lower realms is noteworthy and shows a healthy correlation to Forex. However, support levels continue to prove rather durable when the USD/ZAR tries to move lower. Yet, this is not a negative comment about the South African Rand, financial houses are likely waiting for additional reasons to lean into more bearish USD/ZAR behavior. Reversals higher have been polite.
December Values Being Tested by USD/ZAR Traders
The USD/ZAR has shown that lower values are being targeted by large traders. Yes, reversals upwards after tests lower have been seen. Speculators have an opportunity to try and wager on the slightly higher moves that approach resistance in order to try and pursue lower moves in the USD/ZAR. The knowledge that the USD/ZAR broke below the 17.70000 ratio last Thursday and continues to test the depth is intriguing.
It may be possible that financial institutions are waiting for tomorrow’s U.S CPI inflation data to confirm their belief the USD should be weaker. If U.S inflation on Wednesday meets expectations or is actually weaker than anticipated it will spark widespread belief the U.S Federal Reserve is going to have to be less cautious, and that they will be forced to indicate an interest rate cut will be delivered. However, the Fed might not cut next week and it may say it wants to wait until late July.
Short-Term Betting While Clarity is Debated
It appears many financial institutions believe the USD should be weaker. The USD/ZAR should move lower based on this notion. Yet, the opinion of a weaker USD must be considered a mid-term thought.
- Day traders looking to gain on the momentum created by larger players need to understand the broad Forex market will stay choppy over the short and near-term due to unclear policy insights from the U.S Fed.
- Traders should not get overly ambitious in their pursuit of lower USD/ZAR movement.
- Instead speculators should use quick hitting tactics that try to take advantage of nervousness, which lingers in cautious financial institutions who may believe they shouldn’t over extend their push for a lower USD/ZAR too much.
USD/ZAR Short Term Outlook:
Current Resistance: 17.79800
Current Support: 17.74300
High Target: 17.83100
Low Target: 17.70900
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