As of this writing the USD/ZAR is traversing around the 17.00000 mark with rather strong buying action demonstrating the capability of holding ground. On the 16th of August the USD/ZAR currency pair was near the 16.34000 level with what appeared rather tranquil conditions. However a burst of buying activity began the following day, this upon the publication of the U.S Fed Meeting Minutes which left a sour taste in the mouth of financial analysts and caused a storm to grow.
Lack of Clarity from U.S Federal Reserve Hitting Forex, Including the USD/ZAR
In the past couple of weeks of trading, the USD/ZAR had begun to reflect a potential return to bearish conditions. Highs achieved in the middle of July when the USD/ZAR was trading above the 17.00000 appeared to be in the rear view mirror. Selling flourishes were demonstrated, and on the 10th through the 15th of August lows of nearly 16.15000 came within sight a few times.
The deliverance of sudden buying in the USD/ZAR which began to strike with strength this past Thursday has been maintained. From a technical perspective once the 16.65000 to 16.70000 ratios were proven vulnerable, resistance levels became challenged with rapid fire and the 17.00000 was broken through on Friday. Technical traders may be tempted to believe the USD/ZAR is too high, but they should note the forex pair did touch 17.25000 and higher from the 14th until the 21st of July a handful of times.
Storm Waters Churning and a Sudden Calm may be Difficult to Attain for the USD/ZAR
- The USD/ZAR is mirroring the results of other major currency pairs as the USD has developed strength the past few days.
- While it may be tempting to believe higher values in the USD/ZAR will fade, support near the 16.95000 to 16.90000 ratios should be watched. If these values hold, some traders may believe another wave of buying could develop in the near term.
Visions of a calm end to the month of August have been destroyed in Forex and the USD/ZAR will see more volatility too. It is clear the U.S Fed will raise interest rates again in September, and now it appears some financial houses believe another wave of interest rate hikes will follow. Clarity is in short supply and while technical considerations may attract bearish speculators, being contrarian and selling the USD/ZAR in the near term could prove to be dangerous. Choppy conditions appear ready to remain intact this coming week
USD/ZAR Short Term Outlook:
Current Resistance: 17.04000
Current Support: 16.94000
High Target: 17.19000
Low Target: 16.82000
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