- The USD/ZAR is near the 18.76100 mark as of this morning’s writing.
- The currency pair traded at its highs in the beginning of last week when it toppled the 19.21000 ratio briefly.
- The price movement of the USD/ZAR did produce an incremental trend lower and is bouncing around crucial technical support now.
- Short-term traders will certainly use their one and five day charts to gain a perspective on sentiment, but it might prove interesting for them to look at three and six month charts.
The acknowledgement that the USD/ZAR has once again returned to its known price range and is using the 18.71000 to 18.8400 realm as inflection junctures is intriguing. The price of the USD/ZAR within the current value realm it is moving is likely to remain an important magnate for financial institutions. The South African Central Bank kept its key lending rate in place last Thursday. While the nation’s central bank said inflation has shown signs of slight erosion, they added they would like to see further declines before potentially cutting interest rates in South Africa.
USD/ZAR and U.S Federal Reserve on Horizon
Short-term traders who wagered on downside momentum developing last week based on the belief the USD/ZAR had been over bought may be celebrating. However past performance doesn’t guarantee future results as many investment firms warn. As the USD/ZAR trades near important perceived support levels this morning, the U.S Federal Reserve is approaching on the horizon and conditions may grow choppy in the near-term.
It is quite possible that current value in the USD/ZAR may be viewed a solid frame of reference by financial institutions as they brace for Wednesday’s U.S FOMC Statement. The U.S central bank is not expected to make any earth shaking announcements this week, but speculators and financial institutions will want to hear that a more dovish monetary policy is going to be delivered in the spring.
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USD/ZAR and Broad Market Forex Sentiment
Global financial institutions in January have shown they believed the selloff in the USD was overdone in December. Broad market Forex trading produced plenty of USD buying, including in the USD/ZAR in January. The recent selloff in the USD/ZAR is an indication that financial institutions may have now found what they believe is a trading terrain which will allow it to react to Wednesday’s U.S Federal Reserve rhetoric within its known mid-term range.
- Short-term traders should keep their eyes on support near the 18.75000 to 18.7300 ratios near-term.
- If resistance levels can prove durable around the 18.80100 to 18.84000 ratios, this could create a testing ground for short-term traders trying to take advantage of the current price realm with quick hitting wagers.
USD/ZAR Short Term Outlook:
Current Resistance: 18.78600
Current Support: 18.74900
High Target: 18.84900
Low Target: 18.71800
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