The USD/ZAR is suddenly trading near the 18.31000 vicinity as of this writing. Last Monday the USD/ZAR was above the 19.00000 mark and as late as Wednesday the currency pair continued to test highs around the 19.10000 mark and above. While the higher values were being worried about, speculators who were aware the U.S Fed’s FOMC Statement would be published on late Wednesday were hopefully prepared for the volatility that was delivered.
With nearly a blink of the eye the USD/ZAR proved it wasn’t trading in a nervous vacuum based only on problematic domestic issues shadowing South Africa, the currency pair mirrored other major currencies on late Wednesday and dived lower. The U.S. Fed’s monetary policy shift from a slightly aggressive/neutral stance to a neutral/soft tone created a weak USD across the Forex board. The USD/ZAR moved to a depth of around 18.60900 on late Wednesday.
Sustained Momentum Lower in the USD/ZAR and Perspective
On Thursday the USD/ZAR continued its trajectory lower and touched the 18.27350 area. While Friday’s lower move to around 18.10500 was intriguing, this began to happen in quiet markets where orders became unbalanced because South African financial institutions were celebrating a holiday before going into the weekend. The USD/ZAR began to run into support and reversed slightly higher, and the current price of the currency pair is once again within last Thursday’s price realms.
Speculators will now need to glance at mid-term charts to inspect support levels. The last time the USD/ZAR tested its current values was in mid-November. However, the USD/ZAR hasn’t been able to sustain its current values and lower, since the last week of July. This is not a criticism; in fact it mirrors many other major currency pairs that struggled against the USD the past handful of months.
USD/ZAR Support and Resistance as the Holiday Trading Approaches
- Behavioral sentiment in global markets may remain rather optimistic in the short and near-term.
- USD/ZAR Support levels and resistance should be gauged carefully for potential tests. The 18.26000 to 18.3600 levels could prove to be a testing ground.
- Traders need to remember that holiday trading volumes will start to be seen late this week as financial institutions globally begin to prepare for the Christmas break.
- A lack of significant volumes on Thursday and Friday of this week could allow the USD/ZAR to become volatile and tests a wider range. And by next week the currency pair will trade in very light conditions.
USD/ZAR Short Term Outlook:
Current Resistance: 18.33600
Current Support: 18.30200
High Target: 18.41200
Low Target: 18.25100
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