- As of this writing the USD/ZAR is near the 19.19120 ratio with fast trading being demonstrated.
- While the USD/ZAR like all other currency pairs largely remains at the mercy of a USD centric trading landscape, worries via South African associated financial institutions are likely causing this price rupture because of domestic concerns in South Africa.
Trading in the USD/ZAR also hit the 19.19000 level last Wednesday, then on Thursday and Friday the currency pair managed to move lower and test the 18.90000 levels. However upon opening this morning the USD/ZAR has climbed higher again and speculators now face a question regarding the durability of resistance in the near-term. The South African Central Bank will conduct a monetary policy meeting this Thursday and supposedly make an announcement. Inflation in South Africa remains problematic.
USD/ZAR and Domestic Concerns
While other major currencies have largely started today with polite trading against the USD, the South African Rand has slid. In an almost never ending storyline South Africa continues to face economic problems caused by government mismanagement and rumored corruption. Electrical supply issues remain an ongoing source of frustration for businesses in South Africa which hurt the economy. But it is the South African Central Bank big traders are now focused on.
The U.S will present important growth and inflation data later this week which will certainly affect the USD/ZAR. It is a coincidence that South Africa will release its interest rate and monetary policy this Thursday, while the U.S publishes its Gross Domestic Product numbers, but the combination will cause definite volatility in the USD/ZAR. On the 26th of October 2023 the USD/ZAR briefly touched the 19.26000 price level. And experienced traders of the USD/ZAR know that higher values have been seen before. The question is if and when the South African Rand will calm down and begin to trade in a more polite mode.
Short-Term Worries and Speculation in the USD/ZAR
Traders participating in the USD/ZAR today and tomorrow should be extremely careful. The broad Forex market globally has been volatile too, and risk management is essential in the days ahead. Traders who want to speculate on reversals lower in the USD/ZAR can certainly try, but the upwards mobility of the currency pair has been dynamic and more choppiness is guaranteed.
- GDP numbers will come from the U.S on Thursday, and then inflation data will follow on Friday via the Core PCE statistics.
- Speculators should anticipate additional price velocity today because of the higher price realm of the USD/ZAR being tested. Reversals could flourish in both directions.
- Entry price orders are needed to make sure ‘fills’ do not cause problems for traders.
USD/ZAR Short Term Outlook:
Current Resistance: 19.20000
Current Support: 19.14500
High Target: 19.23900
Low Target: 19.07600
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