The USD/ZAR is near 16.47300 as of this writing and has kept a sustained value early this morning, this as a concern lurks in South Africa this week regarding sentiment.
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After fighting its way from highs last week which approached the 16.67360 vicinity this past Wednesday, the USD/ZAR has eased away from those heights and is near 16.47300 early this morning. The USD/ZAR continues to correlate to the broad Forex market, but a cloud could affect sentiment in South African financial institutions in the coming days.
No, I am not discussing the World Cup loss to Canada last night in which Bafana Bafana remained scoreless and was eliminated from the competition. I am referring to the social unrest in many cities and towns regarding undocumented foreign workers who are being pressured to leave South Africa. While government authorities are insisting on public calm, there remains a potential for unpleasant protests today and near-term. Financial institutions will likely not pay much attention to these events unless they grow out of control. Thus, the USD/ZAR for the moment remains a global story connected to USD centric trading.
Selling Notions and Current Sentiment
Last week’s higher stance in the USD/ZAR was attractive as a selling position. This morning’s return to known lower levels still has the opportunity to look like a place where the currency pair could move downwards, but USD centric trading will have to remain calm. U.S equity indices remain nervous and if another strong selloff is sparked on Wall Street this could affect risk appetite.
Another outside barometer remains the price of energy, and for the moment the U.S and Iran seem to have stepped away from another dangerous escalation which grew loud this past weekend. The price of WTI Crude Oil this morning remains somewhat comfortable and if values flirt with the 70.000 USD mark and lower, this could spur on greater risk taking. The USD/ZAR around 16.47300 via a three month chart is almost in the middle of its technical range.
USD/ZAR Circumstances and Wagering
If current conditions domestically in South Africa do not cause angst with large traders, there is reason to suspect the USD/ZAR could find itself retesting some lower values.
Fears of an interest rate hike from the U.S Fed also seem to be lessening depending on who you listen to and this may calm the broad Forex market.
Noise is a big concern for day traders as sentiment shifts depending on what circumstance is the loudest.
This morning’s rather sideways start for USD/ZAR trading is a positive sign and perhaps a chance to look for some lower, but not overly ambitious, targets using proper risk management.
USD/ZAR Short Term Outlook:
Current Resistance: 16.48100
Current Support: 16.46500
High Target: 16.49900
Low Target: 16.43700
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