The USD/ZAR is near the 18.71600 ratio as of this writing, on Friday before shuttering for the weekend the currency pair hit its high for the week near the 18.80490 vicinity. In early movement this morning the USD/ZAR has drifted lower. The beginning of last week saw the Forex pair around 18.24900 before the USD/ZAR began to incrementally drift higher the remainder of the week with plenty of choppy conditions exhibiting reversals along the way.
The lows made last week touched the value the USD/ZAR had last seen on the 1st of August. On the 26th of October the USD/ZAR reached a high around the 19.28000 vicinity and its slope downwards until the 6th of November was rather remarkable. The question traders need to consider moving forward is if the upward momentum seen since early last week is simply because equilibrium is being sought by financial institutions which likely believed the USD/ZAR had been overbought, or if the move higher last Thursday and Friday occurred because U.S Treasuries began to flirt with higher yields again.
USD/ZAR Traders Should Brace for Choppy Conditions this Week
Speculators who want a clearly defined near-term trend may be in for rather unclear conditions today through Wednesday. While risk appetite in U.S equities seems to have found some buyers, there is important U.S. data coming tomorrow via the Consumer Price Index which will give market participants fresh insights regarding inflation in the States. If the inflation numbers are weaker than anticipated this could cause USD/ZAR selling. However, the results need to be published first, and financial institutions know inflation concerns have caused massive reactions in the broad markets which have affected Forex and the USD/ZAR.
The lower-Price Range is Still in Control with the USD/ZAR
Even though the USD/ZAR climbed higher last week, the currency pair remains within the lower elements of its three-month technical chart and is in the middle of its one-month value range. The ability of the USD/ZAR to remain below the 18.80000 ratio since the end of October has been noteworthy. If the USD/ZAR can sustain this morning’s selloff and stay below the 18.79500 ratio this may be interpreted as bearish going into tomorrow’s important CPI results.
- Retail Sales numbers will come from the U.S. on Wednesday and this will also affect the USD/ZAR with potential volatility.
- Risk-averse buying of the USD/ZAR could remain steady if U.S. bond yields continue to press higher today and cause limited moves upwards via reversals after support is tested.
- Resistance near the 18.75000 ratio should be watched in the short term. If it proves durable this could be a positive sign for bearish considerations.
USD/ZAR Short Term Outlook:
Current Resistance: 18.75100
Current Support: 18.68150
High Target: 18.79025
Low Target: 18.60860
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