As of this writing the USD/ZAR is near the 18.72500 ratio as it continues to trade within the vicinity of lows made yesterday which saw the currency pair touch the 18.62800 area. The lows made Tuesday had last been seen in the USD/ZAR the 1st of September. The selling cycle of trading which has dominated the USD/ZAR since Thursday correlates to other major currency pairs and is a solid sign the Forex pair is healthy enough to mirror global conditions when a hint of risk appetite surfaces in the broad markets.
The ability of the USD/ZAR to stay under 18.80000 in the short term is also noteworthy. Traders looking for further price action lower should note the U.S Federal Reserve will release its FOMC Statement this evening. Importantly, the Fed is not expected to raise its Federal Funds Rate, which means if expectations are met speculators should expect ‘controlled’ volatile conditions to flourish for a few hours later today.
Has the USD/ZAR Selloff Already Factored a Pause from the Federal Reserve?
The question traders will ask as the USD/ZAR flirts with the 18.70000 ratio for the moment, is if the selloff in the currency pair since Thursday of last week has already factored the U.S Federal Reserve’s pause. If so, this could open the door for a couple of hours of a wider range within the USD/ZAR developing for day traders. Risk management with stop loss and take profit targets should be used if a trader plans on pursuing the USD/ZAR during the Federal Reserve’s Press Conference.
18.70000 Should be watched in the USD/ZAR Today
Having traded steadily above 19.00000 during the month of October, the USD/ZAR was likely thought to have been overbought by many financial institutions and traders. However, as the USD/ZAR trades near the 18.70000 level, some of these same players in Forex may believe the currency pair is approaching intriguing support levels. Risk-averse conditions remain evident in the global markets and traders must pay attention to not only U.S economic data but also global developing news regarding the Middle East which could spook trading results momentarily and cause reversals higher.
- If global market conditions remain calm today and the U.S Fed says they are not raising the Federal Funds Rate as expected later this evening, the USD/ZAR could test lower support levels.
- However, day traders who are using too much leverage could find their positions turn into losers quickly if too much price volatility occurs during the Fed’s announcement.
- Near-term conditions are likely to remain challenging since U.S jobs number will be published on Friday of this week.
USD/ZAR Short Term Outlook:
Current Resistance: 18.79960
Current Support: 18.70310
High Target: 18.92800
Low Target: 18.60770
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