- The USD/ZAR hit a high of nearly 19.19500 on early Wednesday of last week.
- Traders participating in last week’s price action were treated to a rollercoaster of volatility as U.S inflation data created mayhem in the financial markets globally.
- As of this morning the USD/ZAR is near the 18.88950 ratio with quiet trading taking place, but with rapid fluctuations.
- There is a U.S banking holiday today and the broad Forex market will not see a lot of volume.
The rather calm trading conditions will likely be welcomed by USD/ZAR speculators and may give them a chance to bet on small quick hitting moves in the currency pair. However, traders participating over the remainder of the day need to understand that a lack of volume in Forex can also lead to sudden spikes in the USD/ZAR if an unbalanced order hits the marketplace.
Moment of Potential Reflection in the USD/ZAR
The USD/ZAR has come off highs seen last week in the wake of the higher than expected U.S Consumer Price Index numbers. The ability to penetrate below the 19.00000 level on Thursday of last week and sustain a lower price realm corresponds to the broad Forex market. Even when the U.S produced another stronger inflation report this past Friday, although the USD/ZAR jumped momentarily upwards, the currency pair did finish within sight of weekly support.
If a trader is tempted to wager on the USD/ZAR today they are encouraged to use entry price orders to avoid spikes which will certainly be seen because of the light volumes. Looking for a vast move today may be overly ambitious in the USD/ZAR, particularly because broad market sentiment remains rather nervous.
USD/ZAR Near-Term Perspective
The USD/ZAR behaved in a rather correlated manner to the broad forex market the past week which is a healthy sign. Given South Africa’s ongoing domestic economic issues caused by government mismanagement the USD/ZAR still must be considered rather skeptically by traders, particularly if they hold hopes for a strong bearish trend to emerge. Today will be very quiet in the USD/ZAR, tomorrow’ trading however will be affected immediately as Forex volumes return to normal. The 18.90000 mark may prove to be an interesting barometer of near-term behavioral sentiment for the USD/ZAR and act as a magnate.
- Traders should use solid risk management today because of the holiday market conditions.
- A range between 18.87000 to 18.92000 may prove to be a testing ground today and heading into tomorrow.
USD/ZAR Short Term Outlook:
Current Resistance: 18.90800
Current Support: 18.88050
High Target: 19.93100
Low Target: 18.87100
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