The USD/ZAR is trading at near-term highs as of this morning with the 19.18000 level being tested with quick changes of value being demonstrated. A couple of hours before the USD/ZAR had been trading slightly above the 19.27000 level, but a reversal lower has developed. However, conditions remain volatile, and behavioral sentiment appears to be extremely fragile as risk-averse sentiment appears to be driving a large part of the global markets.
Highs from the Second Week of October Remain in Sight for USD/ZAR
Speculators who are contemplating higher ground for the USD/ZAR near-term will certainly look at one-month charts. Highs near the 19.64000 level were tested on the 5th and 6th of October. The USD/ZAR did range with volatility above the 19.20000 level and higher from the 2nd until the 10th of this month. Traders who use fundamentals as a base for their perspectives may believe the USD/ZAR remains overbought, but near-term conditions because of U.S equities and U.S Treasuries results are causing nervousness which has been sustained and is potentially showing signs of worse things to come.
Correlations via the USD/ZAR to other major currency pairs are clear. The USD remains the dominant factor as sentiment remains fragile. Today the U.S will release GDP results and tomorrow inflation and consumer sentiment numbers will be published. However financial institutions are being affected also by fears of escalating circumstances in the Middle East. Global markets are used to turbulence, but they are certainly not calm currently.
The 19.20000 Level in the USD/ZAR is Important
If the USD/ZAR can sustain trading below the 19.20000 in the coming hours it will likely then begin to challenge lower support levels. The 19.15000 to 19.10000 values should be watched and traders need to be prepared for rapid price fluctuations, so using entry price orders for the USD/ZAR will be important to avoid sudden bursts of price action which could develop easily today and tomorrow.
- South Africa plays New Zealand in the World Cup Rugby Final on Saturday, while it will not affect the USD/ZAR significantly, many in South Africa will be thinking about the upcoming match. Good luck to the Springboks.
- Traders need to practice solid risk management with the USD/ZAR.
- Perhaps wagering on short-term movements with take profit orders that are closer to the price action will help, while pushing stop losses slightly further away is viable. To use this tactic, very conservative leverage must be used.
USD/ZAR Short Term Outlook:
Current Resistance: 19.21350
Current Support: 19.15100
High Target: 19.28175
Low Target: 18.98400
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