- The US dollar initially pulled back just a bit during the early hours on Wednesday to test the 18.50 level, only to turn around and show signs of life.
- Ultimately, this is a market that I think eventually goes looking into the 19.25 level above, which was at the top of the range.
That is an area that I think will continue to be closely monitored. And whether or not we can break above there remains to be seen. If we can break above that, then we could go looking to the 19.50 level. Underneath we have a lot of support near the 18.25 level and then again at the 18 level. In general, this is a market that I think continues to be very noisy and rangebound.
Range bound
Top Regulated Brokers
We will remain rangebound, and why not? This is a situation where we aren't really sure what's going on with the geopolitical concerns around the world. We don't really know what's going on with interest rates. Clearly, we've been wrong most of the time, and the interest rate differential isn't massive in this USD/ZAR currency pair. So at this point it becomes a risk on or risk off type of trade.
In general, I think this is a market that continues to be choppy, but as long as we can stay in this range, it is very profitable. If you sell overbought conditions and buy oversold conditions. This is a pretty straightforward pair, and I will continue to watch it very closely because it's part of my portfolio occasionally that I take a trade here and there and add to my yearly gains. So I'll be watching the 19.25 level closely for signs of exhaustion to start selling.
On the other hand, if the market were to break above the 19.25 level, then we could run to the 19.50 level. After that, we could be looking at the 20 level, but it would take a major “risk off event” to make this happen. This is a market that remains sideways overall, but there are levels to pay close attention to.
Ready to trade our daily USD/ZAD Forex analysis? Here's a list of the best forex trading platforms South Africa to choose from.