As the last week of trading in September comes to a close for the USD/ZAR, speculators have plenty of considerations while looking forward to October. Yesterday on the 28th of September the USD/ZAR currency pair touched a high of nearly 18.22175, a ratio last seen in May of 2020 when coronavirus was hitting all global economies.
The heights reached yesterday, highlight the chaotic Forex conditions all major currency pairs have experienced the past month, the USD/ZAR has been at the forefront of the volatility. Underscoring the rather difficult circumstances traders have faced, the USD/ZAR reversed lower from the apex values yesterday and enters today’s trading near the 17.95000 vicinity with fast results still flourishing. And before a parade is planned for the downward trajectory the USD/ZAR has achieved the past day, traders may want to note on the 22nd of September the currency pair was near the 17.44000 level, which feels like a lifetime away taking into consideration the past week of trading and how violent it has been.
There is Another Higher Price Range to Consider in the USD/ZAR
Volatility is unlikely to fade away in the coming weeks; in fact speculators may want to embrace it as an opportunity. However, what is heralded as an attractive wagering possibility for traders also means it can be extremely costly if wrong decisions are made. The heightened speed of price action in the USD/ZAR means conservative leverage and risk tactics must be practiced.
- The 18.00000 level was not only touched in the past week of trading, but it was sustained and speculators need to monitor this ratio as an important psychological barometer for the USD/ZAR.
- It is unlikely that the USD/ZAR will suddenly create a new long term trend in a bearish direction, meaning a sustained downturn may be wishful thinking.
Technically and Fundamentally the USD/ZAR Remains in a Solid Bullish Trading Range
Yesterday’s downturn may be held up by some as a demonstration of things to come via their selling perceptions, but betting that the USD/ZAR is going to turn long term bearish and become an overwhelming selling opportunity is not likely. The U.S Federal Reserve remains in a hawkish interest rate mode and will likely still hike further and quite possibly into the winter of 2023. The unclear road signs ahead, which do not allow for a solid economic outlook, are likely to keep the USD/ZAR within the upper realms of its new long term price range.
USD/ZAR Outlook for October 2022:
Speculative price range for USD/ZAR is 17.25000 to 18.60000
October trading may in fact see some downturns and they may appear to be rather promising. Short term traders who look to take advantage of selling opportunities when they believe the USD/ZAR has been overbought cannot be blamed. However, they should stay realistic regarding their goals. The current lower support levels around the 17.40000 ratio do look strong.
If the USD/ZAR is able to sustain pressure downward which has been generated in the past day for a sustained period of time this would be surprising. Traders may want to view the 17.85000 level as a rather stiff test, it if were to prove vulnerable and the 17.75000 mark were to be tested it may not be earth shattering either. A move below the 17.40000 level would be eye raising and worth noting.
The pure chaos within the USD/ZAR and fast results should keep all traders on the top of their toes. If support levels do start to prove durable in the short term, and the USD/ZAR again begins to incrementally rise again, this should not be unexpected news. If the USD/ZAR again moves above the 18.00000 level there is reason to suspect yesterday’s highs could be retested rather effectively. Economic conditions remain troubling globally and domestically within South Africa there are still plenty of hurdles to overcome, including a steady and reliable source of electricity.
Traders who remain bullish in the USD/ZAR may want to use slight reversals lower as a stepping stone to try and ignite buying wagers. The downturn in the USD/ZAR the past day has been strong, but the past month of trading and beyond has displayed a long term bullish trend that effectively still is flexing its muscles. A rise above the 18.20000 to the 18.30000 junctures is not out of the realm of possibility for the USD/ZAR. If these higher values are sustained it could mean additional movement up.
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