The USD/ZAR is around 17.27700 with a wide spread being seen at this moment, this after the currency pair jumped on Friday to a high of nearly 17.49700 momentarily on heightened rhetoric from the U.S White House.
The USD/ZAR is near the 17.27700 mark as of this writing, but day traders need to take into account that a large spread is being seen between the bids and asks as financial institutions try to maintain a calm Forex landscape. The USD/ZAR had been trading near the 17.18200 vicinity on Friday, which was above lows seen on Thursday near the 17.07450 area, but then President Trump caused a momentary panic in the broad markets when he announced new tariff penalties for China. Exact entry price orders should be used today by traders.
The USD/ZAR has been one of the stronger currencies the past two and half months, the currency pair was trading near the 18.38600 level on the 1st of August. Importantly the jump up to that higher value in early August, also happened when tariff news whipped through the Forex markets. The bolt upwards this past Friday and now the return to known lower depths shows the USD/ZAR is trading in a healthy manner.
Reactions and Unknowns for the USD/ZAR
Day traders of the USD/ZAR should practice caution today. While it may be tempting to pursue lower values based on where the currency pair traversed on Thursday of last week, realistic targets should be used. Shadows from the potential of more rhetoric from the White House certainly exists. However, because President Trump is in the Middle East today, perhaps his attention for the moment will remain elsewhere. But it should also be mentioned that President Trump over the weekend spoke about a desire to work with China in a better way.
Financial institutions which turned cautious on Friday and bought the USD/ZAR also needs to be looked upon carefully. The USD/ZAR climb higher on Friday didn’t march in step with other currencies, particularly the EUR/USD which saw the EUR actually get stronger. The lack of correlation on Friday to other Forex pairs via the USD/ZAR is intriguing and opens the door to more fast conditions to come.
Move Lower this Morning for the USD/ZAR
The ability of the USD/ZAR to immediately begin trading lower this morning is a solid sign for bearish traders in the currency pair.
- For speculators who want to sell more, they should remain aware that upon the return to U.S trading offices in the coming hours another reaction may be seen.
- But U.S financial institutions may prove to be rather tranquil, and show that they digested the latest tariff rhetoric from the White House over the weekend.
- Possibly ready to return to their previous sentiment.
- The U.S government shutdown remains in effect. U.S economic data will remain thin.
- Conservative risk taking tactics are advised near-term in the USD/ZAR.
USD/ZAR Short Term Outlook:
Current Resistance: 17.32500
Current Support: 17.27100
High Target: 17.36400
Low Target: 17.24800
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