With November set to start the USD/ZAR remains plainly locked within the higher realms of its long-term price range. As of this writing the USD/ZAR is near the 18.25000 and price action is demonstrating fast velocity as a test of early last week’s value is underway. The USD/ZAR did manage to climb within sight of the 18.60000 realm on the 13th of October, but did trade lower. Current wide support levels for the USD/ZAR appear to be the 17.90000 vicinity.
For the past couple of months of trading the USD/ZAR has allowed traders to buy the currency pair when support has been demonstrated in order to target higher values. The high of early October near the 18.60000 was not a major surprise, the long-term trend of the USD/ZAR has been solid and it doesn’t appear ready to go away anytime soon. Yes, the U.S Federal Reserve may become less hawkish and this might create some selling within the USD/ZAR, but the upwards climb has not come only because of U.S monetary policy.
South Africa remains a nation with a mismanaged Economy and this is bad for the USD/ZAR
South African remains gridlocked within a mismanaged political landscape where corruption is discussed rather openly. This doesn’t lend itself to solid footing for the South African Rand and is a major part of the struggle the USD/ZAR faces as the long term bullish trend remains intact.
When a tourist visiting the beautiful country of South Africa has to fill out a vast array of paperwork and produce identification to simply exchange a small amount of foreign cash for South African Rand, it says something is wrong with the economy. The difficulty of exchanging USD for tourists in South Africa strongly suggests the nation is trying to limit a growing ‘underground’ economy which wants USD instead of ZAR.
- The USD/ZAR has displayed a solid capability to remain above the 18.00000 mark and moves close to or below this value may continue to ignite buying positions of the USD/ZAR.
- The trading range between the 18.40000 to 17.95000 values should be monitored, if it continues to hold this could be interpreted as a negative signal for the South African Rand and spur more buying of the USD/ZAR.
USD/ZAR Outlook for November 2022:
Speculative price range for USD/ZAR is 17.68000 to 18.70000
Price velocity should be watched carefully in the USD/ZAR. Banks in South Africa are aware of the quick change in Forex, which leads them to being very careful about what they offer clients when ZAR is needed when selling USD. The large ‘spread’ in value offered by the banks suggests the USD/ZAR may remain within its bullish stance. However, if the USD/ZAR falls below the 18.00000 mark and can sustain this realm, it is not out of the question the currency pair could test the 17.85000 to 17.75000 marks again. If the USD/ZAR were to fall below the 17.75000 this could produce a test of support near the 17.69000 ratio. The last time the low of 17.69000 was hit, it was the 6th of October.
Traders who believe the USD/ZAR will continue to trade within its higher price range cannot be faulted. The USD/ZAR may not climb above the 18.60000 realm in the coming days or month easily, but if the 18.15000 support level is maintained, then a continued test of 18.25000 to 18.35000 may be demonstrated.
Short term speculators may want to watch current price action, if the 18.25000 realms holds this could be a bullish signal higher values will be tested soon. While it seems the 18.60000 feels safe for the moment, if the 18.30000 to 18.40000 are flirted with financial houses would not likely be surprised. The USD/ZAR is within the grasp of bullish behavior which is being sparked by concerns regarding the management of the South African fiscal policy; this unfortunately is not going to vanish quickly.
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