The USD/ZAR is trading near 16.98000 as of this writing as the currency pair potentially entices speculators as it seemingly sustains value below the 17.0000 ratio. The USD/ZAR has maintained its lower stance since Thursday of last week when it fell to a low around the 16.88100 mark. While the USD/ZAR has traded slightly higher since then the lack of a violent reversal higher is rather intriguing. On Friday the USD/ZAR traded at a high of nearly 17.05000 before starting to sell off again.
Traders of the USD/ZAR Should Remain Cautious because of the Holiday Season
The USD/ZAR selling momentum which has been generated and the lower range that has sustained Tuesday of last week are intriguing. However, before traders decide to wager on bearish momentum continuing in the short-term, they must take into consideration the fact that holiday transaction volumes remain very light and this may be having an effect on the USD/ZAR.
Short-term traders need to consider the potential that large financial houses could cause volatility within the USD/ZAR. While the trend lower in the USD/ZAR since early November correlates to the broad Forex market as the USD has gotten weaker against many major currencies, risk-taking should be done with realistic targets. Support near the 16.97000 ratios short-term should be monitored. Light holiday trading volumes can certainly lead to reversals higher which may prove to be an opportunistic wager for speculators who like quick-hitting bets.
Risk Events via U.S Federal Reserve Meeting Minutes on Wednesday
While economic data may not have the biggest effect on Forex this week because many institutional traders remain away from their desks, there are some risk events to look out for in the coming days. Tomorrow the U.S. Federal Reserve will publish its Fed Meeting Minutes which will provide an insight into the thinking of the central bank and its outlook regarding interest rate policy. While the Fed is seen as becoming less aggressive, this doesn’t mean they will stop raising interest rates and this will keep USD/ZAR traders nervous.
- U.S. employment data will be released later this week which always gets the attention of traders and may cause choppy trading in the USD/ZAR.
- The 17.00000 vicinities should be watched by day traders as an inflection point. Sustained trading under this mark could indicate financial forces are leaning towards more bearish perspectives regarding the USD/ZAR.
Short-term traders of the USD/ZAR should remain cautious as holiday trading volumes remain light. Volatility could suddenly erupt and turn a quiet USD/ZAR market into a loud landscape. Wagering with fast trades using narrow take-profit targets in the near term may be the best way to bet on the USD/ZAR for those who do not want to carry trades overnight.
USD/ZAR Short-Term Outlook:
Current Resistance: 17.02790
Current Support: 16.94100
High Target: 17.11900
Low Target: 16.86000
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