The USD/ZAR catapulted from its lows seen early last week and correlated with the broad Forex market as the currency pair turned upwards starting on last Wednesday.
- Upon the higher than expected U.S inflation numbers published last Wednesday the USD/ZAR saw a swift bolt upwards.
- The USD/ZAR went from nearly 18.44000 to the 18.80600 vicinities rather quickly. However the upwards mobility of the USD/ZAR did not stop there and as the weekend approached the currency pair had come within sight of the 18.98000 surroundings before finishing approximately near the 18.85100 level.
- As of this morning the USD/ZAR is again higher and near the 18.93100 ratio with quick trading being seen.
The downwards slope in the USD/ZAR created from about the 1st of April until the 10th was not an accident and correlated to the broad Forex market, but the selling within the currency pair appeared to have been overdone. Domestic economic concerns in South Africa and the coming elections within the nation remain a troubling nervous point for financial institutions.
USD/ZAR Higher Reaction and Correlations to the Broad Forex Market
The 18.45000 to 18.41000 ratios early last week certainly proved to be rather durable support levels for the USD/ZAR and the reversal higher after the stronger than anticipated Consumer Price Index statistics from the U.S were a natural reaction. The question for speculators as they consider the rather anxious sentiment globally regarding the current strength of the USD is where resistance will again prove reliable as a place to look for downwards momentum.
The U.S will be releasing important Retail Sales data today and the outcome will affect behavioral sentiment in the USD/ZAR. The 19.0000 is within sight as a target for speculators with ambitions of seeing an additional move higher. However, if the U.S Retail numbers come in weaker, this could help propel the USD/ZAR lower in the near-term. The shadow hanging over the U.S Federal Reserve’s outlook regarding interest rates will continue to cause choppiness this week for the USD/ZAR.
Short-Term Ambitions and Speculative Wagers in the USD/ZAR
Trading has been fast in the USD/ZAR and this is likely not going to change in the short and near-term. The ability of the USD/ZAR to reclaim its higher price range has been accomplished rather easily and traders who believe the currency pair has been overbought should be mindful of the notion that higher prices were seen in the last week of March which toyed with the 19.0000 to 19.07000 ratios with outliers.
- Looking for downwards momentum in the near-term may feel like the correct wager in the USD/ZAR, but today’s U.S Retail Sales data will likely have to be weaker to help that sentiment.
- Traders should use solid risk management in the USD/ZAR and cautious leverage, the currency pair has been volatile and sudden bursts may continue to flourish.
USD/ZAR Short Term Outlook:
Current Resistance: 18.94100
Current Support: 18.90110
High Target: 18.98900
Low Target: 18.83060
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