The USD/ZAR correlated to the broad Forex market with an almost adventurous capability last week. Going into the weekend the USD/ZAR currency pair did produce a slight buying demonstration, but before the reversal upwards the currency pair had accomplished plenty of selling power. The USD/ZAR started last week near the 18.80000 ratio and finished Friday’s trading around 18.10000.
Upon opening this morning the USD/ZAR has remained rather consolidated and is traversing the 18.12300 vicinity with its typical exhibition of price changes taking place. Last week’s strong velocity downwards started on Wednesday when the USD/ZAR was able to penetrate the 18.40000 level and continue moving lower. By Thursday of last week the currency pair was able to touch the 17.90000 level, which is a mark the USD/ZAR had not seen since the first week of April this year.
USD/ZAR in Sight of Mid-Term Technical Support
The ability of the USD/ZAR to fight lower and seemingly sustain lower prices has been strong since the 7th of July when the Forex pair was trading around the 19.15000 juncture. Conditions in the USD/ZAR remain volatile because of South Africa’s domestic political and economic issues which keep financial institutions in a state of anxiety, but the currency pair has also shown a remarkable capability to mirror global Forex conditions as the USD has gotten weaker.
The current value of the USD/ZAR is within sight of important mid-term support and the 18.00000 needs to be monitored. The last time the USD/ZAR traded in a sustained manner below the 18.0000 level was between the first week of November 2022 until the end of the second week in February of this year. Yes, the USD/ZAR traded below 18.00000 on Thursday of last week, and saw price action between 17.75000 and 18.00000 in the first week of April this year, but reversals higher have plagued the USD/ZAR many times.
U.S Data is Causing Questions Regarding Future Federal Reserve Policy
- The U.S will release the Empire State Manufacturing Index today. Recent U.S data has been stronger than expected, but inflation remains a concern.
- The U.S Federal Reserve is still expected to raise interest rates on the 26th of July, but many analysts believe the central bank will have to become less aggressive after the anticipated hike.
Day traders of the USD/ZAR have likely been tested by the rather fast price velocity of the currency pair. Quick hitting trades that target support levels after a slight reversal higher has been made could be a tactic for speculative wagers near-term. The 18.20000 level of the USD/ZAR should be watched to see if it remains durable. If technical resistance above proves to be strong, this might inspire more short-term wagers looking for downside price movement.
USD/ZAR Short Term Outlook:
Current Resistance: 18.14200
Current Support: 18.11100
High Target: 18.23400
Low Target: 18.03400
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