The USD/ZAR as of this writing is near the 17.68000 ratio as of this writing with fast results being produced. A high yesterday of nearly 17.79200 was demonstrated briefly before a slight reversal lower took place. However, the move downwards after Monday’s high water marks still remains firmly within sight. Yes, on the 13th of September the USD/ZAR currency pair did trade below the 17.00000 ratio for a moment. However, the move upwards since this lower depth has been strong.
U.S Interest Rates and South African Economic Reality are Factors for the USD/ZAR
Inflation data from the U.S has made it clear the U.S Federal Reserve will hike its interest rate tomorrow. The rise in interest rates has already been factored into the value of the USD/ZAR most likely. However, financial houses are awaiting the U.S central bank’s outlook tomorrow, which may offer clarity regarding more interest rate hikes to come at the end of this year and beginning of 2023.
The rising interest rates from the U.S, combined with troubling economic factors from South Africa as the nation continues to grapple with a poor supply of electricity is proving bad for behavioral sentiment. Yes, the people of South Africa may accept ‘loadshedding’ as a normal part of life, but it is having an impact on the nation’s economy too. This past weekend’s increased ‘brownouts’ in the Western Cape will not help confidence.
Highs above 17.00000 may appear Overbought, but how do Potential Highs of 18.00000 Look?
- If current support levels near the 17.58000 to 17.55000 realms prove durable, this could spark concern the USD/ZAR is establishing a ‘new’ higher price range.
- Volatile conditions should be anticipated the next day and a half as the U.S Fed is waited on.
Speculative traders of the USD/ZAR may believe the Forex pair has been overbought, but if current support ratios start to hold it could trigger the notion that the current higher values of the USD/ZAR are becoming the ‘norm’. Traders should recall that during the height of coronavirus, the USD/ZAR did touch highs around 19.20000.
This isn’t to say that highs of 2020 will be seen again, it is to point out the USD/ZAR has traded above its current values before. If resistance near the 17.73000 level begins to be flirted with, traders cannot be blamed for believing highs of 17.80000 will be achievable. Speculators who remain bullish and practice solid risk management cannot be blamed for aiming for higher targets in the near term.
USD/ZAR Short Term Outlook:
Current Resistance: 17.71400
Current Support: 17.63900
High Target: 17.84000
Low Target: 17.60200
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