The USD/ZAR has produced a rather durable wide near-term range for speculators as national issues within South Africa seemingly have delivered a workable reality.
The USD/ZAR is near the 17.30600 ratios as of this writing in early trading this morning. The speculative range of the USD/ZAR since the start of December has been rather wide, but in some respects can be said to be rather polite because the currency pair has also been able to maintain its stance. The 17.10000 to 17.75000 ratios have seen most of the trading action with outliers mostly being seen in the first week of the month.
USD/ZAR Holiday Trading now needs to be considered
As the USD/ZAR now begins to approach the holiday season, trading volumes will start to become thin and this will also happen in the broad Forex market. The rather wide range the USD/ZAR has displayed the past few weeks has in some respects almost become rather consolidated with price action mainly between 17.20000 and 17.70000 since the middle of December. Yes, the potential for breaking through these support and resistance levels heightens when there is light trading if an unbalanced USD/ZAR exchange takes place, so beware.
However, speculators may be keen on the opportunity to try and take advantage of the USD/ZAR ability to show downward price action which has been followed by strong buying. The outlook for the USD/ZAR remains focused on U.S. Federal Reserve interest rate policy and national South African political stability. Choppy conditions may entice some speculators as they bet on the USD/ZAR.
Leadership Questions in South Africa have been Answered for Now
Political leadership within South Africa has been solidified recently and while the outcome might not please some people, it is the reality and it is leadership that is known. Stability within the South African government could help financial houses consider their outlooks and make them feel reasonably secure about fiscal policy to come.
- The USD/ZAR is trading near the low end of its short-term range as it bounces close to support levels. If the 17.30000 is sustained and made to look vulnerable it could produce additional selling.
- Price action in the USD/ZAR could be quick today and tomorrow as financial houses place their Forex positions before the Christmas holiday, meaning short-term volatility could be produced.
Risk management should be used by all USD/ZAR traders to protect against the potential of short-term price action becoming dynamic if the wide range of the currency pair gets tested before the holidays begin. The USD/ZAR has certainly produced fast trends but they have been choppy and reversals have been commonplace. Taking advantage of perceived resistance levels near-term and igniting selling positions may be a worthwhile wager, but caution is advised in the USD/ZAR this week.
USD/ZAR Short-Term Outlook:
Current Resistance: 17.43400
Current Support: 17.27800
High Target: 17.55100
Low Target: 17.17100
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