- After suffering upwards momentum in the third week of November, the USD/ZAR has seen a rather steady bearish force emerge once again in the currency pair.
- Yesterday’s lows touched the 17.06000 vicinity depending on the bids and asks, proving able to go beneath Friday’s bearish price action.
- The last time the USD/ZAR has traversed its current depths was intriguingly around the 17th of November, this before the move higher when the currency pair hit the 17.48000 level on the 21st of that month.
USD centric weakness has been evident the past couple of days in Forex and the USD/ZAR continues to correlate with plenty of the action in the broad market. However, the USD/ZAR has also shown its own unique ability to move lower even when major currencies have struggled sometimes against the USD in the past couple of months.
G-20 and Risk Premium Considerations in the Rand
Under the shadow of a G-20 conference being held in South Africa recently that did not get the wanted participation of the U.S White House, the USD/ZAR has managed to remain rather steadfast within its rather durable bearish trend. Yes, there are certainly questions domestically in South Africa regarding corruption and fiscal policy, but the USD/ZAR has moved back to within price ratios not seen since September 2024.
The last time the USD/ZAR was able to sustain prices below the current ratios being traded was in December of 2022 and January of 2023. Day traders who want to wager on the ability of the USD/ZAR to continues its trend lower may be correct, but moves lower have come with volatile reversals upwards since the first week of April 2025, this when the USD/ZAR surged above the 20.00000 level momentarily. Risk premium has deescalated even as the Trump administration’s rhetoric towards South Africa continues and it can still present problems.
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Near-Term Consideration for the USD/ZAR
The U.S has seen weaker economic data the past week. This Friday an important inflation number will be published that the Federal Reserve gives importance. On the 10th of December the Fed will make its interest rate decision and this will impact the USD/ZAR.
- Financial institutions may be starting to lean into the belief another cut to the Federal Fund Rate will be seen next week.
- Thus, the temptation to wager on slightly lower price action in the USD/ZAR may exists, but speculators need to be careful.
- If profits are made via short-term wagers, it will be important for traders without deep pockets to remain realistic and cash in winnings when targets are hit in the short and near-term.
- The USD/ZAR remains volatile and its trend lower has not been a one way street for speculators.
USD/ZAR Short Term Outlook:
Current Resistance: 17.13700
Current Support: 17.11500
High Target: 17.16400
Low Target: 17.10800
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