The USD/ZAR has been rewarded with a selling trend and is bouncing up against important support levels as financial institutions contemplate their outlooks.
- Trading in the USD/ZAR has been controlled by behavioral sentiment coming from the positive results via the national unity coalition agreement which has been officially agreed upon.
- As of this morning the USD/ZAR is near the 18.38275 realm with fast changes being displayed due to light volume and a banking holiday in South Africa
Trading houses are likely still getting used to the notion that optimism exists within the financial circles of South Africa. It doesn’t mean everything can or will be solved regarding the mismanagement and alleged corruption which has been seen for a number of years in the nation, but certainly a new sense of hope is felt about conditions potentially improving.
USD/ZAR Optimism and Mid-Term Support Levels
The selloff of the USD/ZAR and ability to hover near mid-term lows is intriguing and creates speculative notions which must now consider the ability of South Africa Rand to trade in a manner which sees less volatility towards the upside. The current price levels of the USD/ZAR are within sight of values seen in the last few weeks of May when steeper lows were actually seen because of the stronger USD during that period.
No, the new government coalition of South Africa is not going to solve all the economic issues which are problematic in the nation overnight, but the confidence in the capability for improvement certainly is going to help behavioral sentiment. Speculative sellers may be tempted to pursue downwards momentum in the USD/ZAR when they feel technical resistance is being tested. Today’s banking holiday in South Africa will limit volumes in the USD/ZAR quite a bit, but it does open the door for the potential of wagering on moves that might journey too high in the short-term.
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Near-Term Speculation in the USD/ZAR
Tomorrow’s and Wednesday’s trading in the USD/ZAR will be intriguing and important to watch to see where resistance levels begin to prove durable. There does appears to be terrain the USD/ZAR can build to the downside and potentially test lower values seen from the 15th until the 29th of May.
- Traders should not get overly ambitious and make sure they are pursuing the USD/ZAR also with the acknowledgement that financial institutions may believe the currency pair is around an acceptable equilibrium for the moment.
- Quick hitting trades that wager on downside after technical resistance is demonstrated upwards may prove worthwhile. However, today’s holiday may cause unforeseen volatility because of unbalanced orders.
USD/ZAR Short Term Outlook:
Current Resistance: 18.39100
Current Support: 18.36600
High Target: 18.43775
Low Target: 18.30200
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