The USD/ZAR is trading near the 18.36000 mark as of this writing. A low yesterday near the 18.15200 mark touched values last seen in the first week of August. The bearish trend lower in the USD/ZAR mirrors many other major currency pairs which have seen selling pressure in the USD mount. The price velocity of the USD/ZAR however should also serve as a reminder to traders that they need to be careful and use solid tactics to pursue the currency pair. Things are moving fast in the USD/ZAR and this may remain a story in the near-term as equilibrium is sought.
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On Wednesday of last week the 1st of November, the USD/ZAR was trading near the 18.75000 ratio, which was a solid accomplishment considering the Forex pair was near the 19.27500 mark on the 26th of October. The decline of value last week upon the U.S Federal Reserve’s announcement that they would not be raising the Federal Funds Rate created more incremental selling. And then on last Friday before going into the weekend, the U.S jobs data came in below expectations and another push lower was achieved.
Yesterday’s Lows in the USD/ZAR are Intriguing
The ability of the USD/ZAR to continue momentum lower yesterday and experience only slight reversals upwards is a solid indicator perhaps for speculators who have been wagering on lower momentum. The incremental highs yesterday have seen volatility, but if the USD/ZAR can maintain its current value realm and stay below resistance around the 18.4500 to 18.47000 ratios in the near-term this could be considered a good sign by bearish sellers. The desire to pursue further downward movement in the USD/ZAR if resistance levels are challenged and prove durable could grow a desire to sell.
Lack of Significant U.S Data but Plenty of Federal Reserve Rhetoric Coming
The USD/ZAR is likely to be affected more by behavioral sentiment from the global markets and attitudes of financial institutions over the near-term. There is a lack of key economic data from the States today. However, Federal Reserve officials will be making a rather steady stream of speeches today and the remainder of this week in which interest rate outlooks will certainly be discussed.
- The USD/ZAR is within sight of important mid-term support. U.S Treasury yields should be watched, if they decline this may create more USD weakness.
- After the rapid declines in the USD/ZAR some upwards reversals may develop, but bearish traders may believe this is an opportunity to pursue more selling.
- Support near the 18.31500 should be monitored. This may be a target for speculators in the short term.
USD/ZAR Short Term Outlook:
Current Resistance: 18.39990
Current Support: 18.33010
High Target: 18.44700
Low Target: 18.25100
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