The USD/ZAR is trading near the 17.07300 mark as of this writing in rather fast conditions as financial houses returning from the long holiday season cause volatility while searching for a ‘fair’ equilibrium. The past few days in the USD/ZAR have exhibited rather abrupt reversals higher and lower. This past Friday the USD/ZAR climbed to nearly the 17.43000 mark, before swiftly turning lower and challenging the 17.05800 ratios.
USD/ZAR Responded to U.S Inflation Data via Wages
After climbing to highs last Friday not seen since the 20th of December possibly based on the notion the USD/ZAR had been previously oversold, suddenly the currency pair ripped lower when U.S Hourly Wages data came in lower than expected. The stark move downwards in the USD/ZAR mirrored other major currencies and intriguingly on Friday the USD/ZAR did not break below the 17.05000 mark. This highlighted that some financial houses still may feel anything below 17.00000 is oversold.
However, upon opening this morning the USD/ZAR continued to mostly trade lower, after touching the 17.12000 mark early today after a short reversal higher. The range of the USD/ZAR has been able to maintain some of its bearish qualities and is within sight of intriguing support levels. If the USD/ZAR can sustain a price below 17.05000 this may be seen as a bearish signal.
Choppy Trading in USD/ZAR should be expected in the Near-Term
As full trading volume becomes restored in the USD/ZAR today and tomorrow the currency pair is likely to experience choppy results. If resistance near the 17.10000 to 17.13000 ratios proves durable this could ignite the interest of speculators who have selling on their minds. However, traders should be aware that important U.S data looms for this coming Thursday.
- Key U.S inflation statistics will be published this Thursday via the Consumer Price Index readings.
- While the USD has gotten weaker against most major currencies, financial houses would certainly like to see U.S inflation come in weaker than anticipated. If this occurs the USD/ZAR could see additional strong selling.
Having touched a low of nearly 16.77000 on the 4th of January, traders may be speculating on stronger selling to erupt. However speculators should not be overly ambitious in the short-term, because financial houses that can make large transactions in the USD/ZAR may remain quite cautious until Thursday’s important U.S inflation data is reported. Until then, traders may want to ignite quick hitting selling positions only when resistance levels are flirted with to try and capture some downside price action.
USD/ZAR Short-Term Outlook:
Current Resistance: 17.13500
Current Support: 17.02900
High Target: 17.26900
Low Target: 16.88400
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