- The USD/ZAR is near the 18.77025 ratio as of this writing.
- Early last week the currency pair touched the 18.50000 mark momentarily as financial institutions leaned into a notion that U.S inflation would show signs of erosion.
- However, Thursday’s Produce Price Index numbers from the U.S renewed concerns that inflation in the U.S is strong, and the Federal Reserve is not going to be able to become as dovish as has been anticipated.
In early trading this morning the USD/ZAR is near highs that it traversed on the 8th of March. Yet, the higher price action of the currency pair is not close to the volatility which was seen late in February when the 19.40000 level came into sight. Domestic economic concerns remain troubling in South Africa, but the trading in the USD/ZAR demonstrated the past few weeks has shown a correlation to the broad Forex market.
Dynamic Short and Near-Term Price Action in the USD/ZAR
Traders will need to remain alert with the USD/ZAR not only today but the remainder of the week. Behavioral sentiment is nervous and outlooks are cloudy because financial institutions remain unclear regarding the direction of interest rates to come. While many investors have geared their outlooks towards a weaker USD in the mid-term, and this has helped create the downwards momentum generated the past few weeks in the USD/ZAR, recent data has produced headwinds.
The movement higher in the USD/ZAR early today indicates traders are uneasy about the short and near-term because the Federal Reserve will be speaking this Wednesday. While the U.S Fed is not expected to make any changes to policy this week, conditions have produced sideways choppy price action and this has created fast hitting test of support and resistance technically.
USD/ZAR Resistance Levels and Tests to Come
Traders of the USD/ZAR have seen a wide price range the past week with velocity causing problems for speculators who have not been practicing solid risk management. Current conditions are likely to see additional volatility as equilibrium is sought by financial institutions as they weigh their outlooks regarding U.S Fed monetary policy. The 18.80000 level as resistance in the USD/ZAR should be watched in the near-term. If this mark can prove durable it may signal some sentiment believes the currency pair can trade lower.
- USD/ZAR traders should not get overly ambitious regarding their short-term targets; volatile quick changes to value may continue to be demonstrated in the short-term.
- Traders are urged to use entry price orders and practice solid risk taking tactics in the near-term as the USD/ZAR provides a rather choppy value range.
USD/ZAR Short Term Outlook:
Current Resistance: 18.79940
Current Support: 18.75880
High Target: 18.83010
Low Target: 18.72160
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