The USD/ZAR is near the 19.00100 mark as of this writing. The key psychological level of 19.00000 is being tested early this morning, and the currency pair went into the weekend rattling near highs last seen in late October. While domestic troubles are certainly factoring into nervousness for the South African Rand, it must be noted the USD has been stronger against most major currencies the past week in a volatile manner and the USD/ZAR is reflecting a broad Forex market.
The path upward for the USD/ZAR has not been a steady trajectory and day traders who have remained stubborn and without deep pockets have likely been affected negatively. It is important to be able to change your mind when you are looking for quick-hitting trades as a speculator and the USD/ZAR has demonstrated why via its one-week technical chart. The USD/ZAR was trading near the 18.71000 vicinity on Thursday last week which was a low before reversing higher.
USD/ZAR Abrupt Swings in Value Followed by Vulnerable Resistance
The ability to climb higher for the USD/ZAR started early on Friday and might be a signal financial institutions thought Thursday’s depths had created oversold conditions. The USD/ZAR climbed towards the 18.90000 realm rather easily and was trading within this midst, when the U.S jobs data was released and then the currency pair started to re-challenge near -term resistance levels. On Tuesday the 5th of December the USD/ZAR did touch the same highs. And as of this morning the weekly high is being fought over again.
Two notable events will affect trading for the USD/ZAR this week and until then if the currency pair remains near its highs, this could mean that financial institutions are prepared to see more buying momentum. The U.S. Federal Reserve will release its FOMC Statement this Wednesday. And this coming Friday is a national holiday in South Africa, honoring the South African Springboks Rugby World Cup victory a couple of months ago. Banks in South Africa will be closed this Friday, which means Thursday’s trading volumes as they react to the U.S Fed’s monetary policy rhetoric from Wednesday could cause more volatility because of the long weekend to come.
Short and Near-Term Range for USD/ZAR Troubling
- The higher values being tested by the USD/ZAR are noteworthy, but the currency pair has traded above 19.00000 during occasionally solid durations this year, on and off from May until the end of October. These heights have obviously also been followed by strong selloffs.
- Many speculators may believe the USD/ZAR has been overbought now, but they should use strong risk management if they are wagering on lower moves in the near-term, meaning before the U.S Federal Reserve’s FOMC Statement.
USD/ZAR Short Term Outlook:
Current Resistance: 19.02400
Current Support: 18.98200
High Target: 19.05750
Low Target: 18.91410
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