Nervousness persists in the broad financial markets and the USD/ZAR has demonstrated a healthy dose of similarity to global Forex trading. The currency pair has shown an ability to come off highs demonstrated after the USD/ZAR ripped upwards earlier on Wednesday until Thursday when a mark of nearly 19.26600 was reached. However, the USD/ZAR has now stabilized and is resting within its known higher range.
U.S GDP Numbers Caused a Rumble in USD/ZAR and Broad Forex Market
Growth numbers from the U.S last Thursday came in slightly below expectations which seemed to spur on selling of the USD/ZAR. However, a high degree of nervousness continues to exist in the markets as financial houses deal with the notion the U.S Federal Reserve is likely going to raise interest rates in November. Although the Gross Domestic Product results were below its estimate, the data did show the U.S economy continues to grow. The USD/ZAR as of this writing is near the 18.93650 mark which is still within sight of the 19.00000 and within the upper realms of its mid-term price range.
Gold as Barometer and Potential Sign More Nervousness to Come in USD/ZAR
The short-term promises to be rather fragile with the USD/ZAR. One potential sign of nervous sentiment shadowing the broad Forex market is the current price of Gold which has sunk rather violently over the past handful of days. While the USD/ZAR has certainly come off highs generated in the middle of last week, important U.S. data will be seen later this week which will likely keep financial institutions and speculators rather cautious in the short and near term as they consider their outlooks. The lower costs of gold indicate the USD is strong globally.
- Non-Farm Employment Change numbers will come from the U.S. this Friday. Also, Average Hourly Earnings will be published this Friday from the States.
- The combination of these two reports coming at the end of this week will keep the USD/ZAR cautious and possibly deliver volatility on Friday.
Although a low of nearly 18.76000 was momentarily hit early last Friday by the USD/ZAR a reversal higher did get sparked. The downward move of the USD/ZAR since highs were touched on Thursday is intriguing, but perhaps not a sign that a sustained bearish move in the currency pair is going to be sustained in the near term.
Broad market conditions remain nervous globally and the USD/ZAR is mirroring other major currency pairs teamed against the USD. Traders may want to use lower moves towards technical support as a speculative opportunity to seek quick-hitting upward reversals in the USD/ZAR in the near term.
USD/ZAR Short Term Outlook:
Current Resistance: 18.96100
Current Support: 18.92300
High Target: 19.03400
Low Target: 18.89100
Ready to trade our daily Forex forecast? Here’s some of the best trading platforms in South Africa to check out.