The USD/ZAR has moved to new lows this morning as incremental selling of the currency pair continues, but speculative suspicions need to be given attention.
- The USD/ZAR as of this morning is near the 18.79280 ratio with quick trading being seen as the currency pair is testing lower values not seen since the 12th of April in a sustained manner.
- The USD/ZAR is correlating to the broad Forex market which has seen the USD lose some power in the past handful of days.
- This has occurred it appears because financial institutions may be counting on their outlooks regarding the U.S Federal Reserve not to get any worse. The low for this morning was near the 17.71760 ratio.
USD/ZAR traders need to remember the U.S Fed will announce their FOMC Statement this Wednesday. In the near-term the currency pair may remain choppy, but the ability of the USD/ZAR to trade lower again this morning following the selling that has been seen in incremental steps since Wednesday may lead to more speculative bearishness via wagers.
USD/ZAR Near-Term Worries and the Potential for Reactions
While support levels have been brushed aside since the USD/ZAR reached a high around 19.27400 this past Wednesday and price velocity lower has been robust, traders should not get overly confident about the momentum for new depths continuing. The Fed’s FOMC meeting is not going to produce a rate cut, and the knowledge that U.S jobs numbers will be published this Friday will likely add some hurdles for more rapid selling in the USD/ZAR in the near-term.
If the USD/ZAR can stay below the 18.80000 ratio today this may be a sign that financial institutions are leaning towards more bearishness, but the shadows from the Fed and the U.S jobs numbers may create braking power for traders who are too ambitious about lower depths. Support levels near the 18.77000 to 18.75000 ratios can certainly be targeted, but take profits orders may be wise to use to guard against the potential of sudden reversals.
USD/ZAR in a USD Centric World with South African Political Shadow
The USD/ZAR is certainly trading in a USD centric mode which is taking advantage of selling sentiment globally for the moment, but this might come to an abrupt end. Also the knowledge that the South African election is officially one month away should serve as a reminder many questions linger about domestic policy in the nation, which include large concerns economically and regarding infrastructure.
· The ability of the USD/ZAR to create selling pressure is welcomed but the currency pair remains capable of becoming volatile.
· The rapid move lower may cause some financial institutions to believe the USD/ZAR is potentially reaching values which look like they may be too oversold.
· The USD/ZAR did trade to a low of nearly 18.41175 in early April, but traders who are selling need to remain realistic and not reach for the stars quite yet.
USD/ZAR Short Term Outlook:
Current Resistance: 18.80600
Current Support: 18.78150
High Target: 18.84790
Low Target: 18.73700
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