The USD/ZAR began to sell off on Thursday of last week and sustained lower momentum going into the weekend, setting up speculative days to come for the currency pair.
- The USD/ZAR currency pair touched a high of nearly 18.53100 on Thursday of last week before seeing bearish selling generate in the wake of turbulent reactions from U.S economic data.
- The currency pair sustained its bearish momentum into Friday and remained within lower price realms going into the weekend, essentially finishing within a range the USD/ZAR has challenged since the 19th of July.
The higher price movement within the USD/ZAR early last week correlated to the broad Forex market. While the move higher to prices not seen since early July may have made speculators nervous that USD/ZAR behavioral sentiment was shifting, the move upwards may have had more to do with USD centric nervousness. The ability of the USD/ZAR to turn lower late in the week also correlated with global trading in other major currency pairs.
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USD/ZAR Movement and Economic Data Influences
The USD/ZAR as of this writing is near the 18.36000 mark with fast fluctuations being demonstrated. Traders should brace for another active week of quick hitting movement in the currency pair, particularly as the U.S Federal Reserve releases its FOMC Statement this Wednesday and jobs numbers will be published on Friday. U.S economic data last week provided a potential outlook regarding the Fed’s coming monetary policy for the 31st of July.
While GDP growth numbers improved in the U.S, the GDP Price Index actually came in lower than expected. The results helped create dynamic price action in the USD/ZAR this past Thursday when the currency pair initially jumped on the growth number, and then traded lower as inflation concerns became tamer and relaxed financial institutions outlooks regarding the Fed.
USD/ZAR and the Coming Fed Announcements
The Fed Reserve could sound more dovish this Wednesday which could help spark bearish sentiment in the USD/ZAR. While support has looked solid around the 18.29000 realm in the USD/ZAR during the near-term, if this target proves vulnerable and price action is sustained below this would indicate bearish sentiment is flirting with the notion of more selling. Moves higher in the USD/ZAR in the next couple of days may prove to be speculative selling opportunities for the bold.
- Resistance levels need to be watched by day traders, the ability to traverse higher last week is a healthy warning price velocity remains fast in the USD/ZAR.
- The 18.42000 level above may prove to be an intriguing juncture, if it proves durable this could help create more belief a lower USD/ZAR is going to develop speculatively.
- Today and tomorrow will see positioning before the U.S Fed announcement on Wednesday, which will create fast flash movements.
USD/ZAR Short Term Outlook:
Current Resistance: 18.37700
Current Support: 18.31000
High Target: 18.42900
Low Target: 18.23600
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