The USD/ZAR moved towards rather durable support in early trading this morning when the 17.50000 level was penetrated slightly lower temporarily, but then produced a slight reversal higher.
- The USD/ZAR is within sight of important near-term support, having tested the 17.50000 mark early this morning with a gap lower following the weekend.
- The U.S jobs numbers which were far below the anticipated outlook may have been a factor in the display of selling pressure this morning.
- The U.S Federal Reserve will announce its interest rate policy this coming Thursday and door appears open for an interest rate cut of 0.25 to take place.
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But hold on dear traders. The U.S Presidential election begins in less than 24 hours. Trading in the broad markets including Forex is going to become a casino like environment. Speculators who insist on participating with the USD/ZAR must understand the potential for sudden price surges and widespread nervousness. Uncertainty over the next day and into Wednesday will cause extreme conditions.
USD/ZAR and Wagering in A Storm of Uncertainty
Day traders who believe the USD/ZAR is still within over bought price ratios may be proven correct, but technical perceptions and Forex positions today and tomorrow will need to grasp the notion that few things will make any sense. In other words, traders of the USD/ZAR who want to trade need to monitor their positions and probably be looking for quick hitting wagers that seek limited targets.
The outcome of the U.S election will cause an immediate large tide of nervousness and choppy conditions filled with potential reversals. Traders who make the decision to participate in the USD/ZAR are advised not to make wagers which are betting on the outcome of the U.S election unless they have enough money to ride the price volatility which will be seen.
Costly Trading and Large Spreads for the USD/ZAR
The costs of trading the USD/ZAR exchange pair could also increase today and into the next few days via brokerages, this as the spread between the bid and ask grows wider. Traders are advised to use entry price orders because trying to enter the USD/ZAR with a market order almost insures a fill will not meet full expectations.
- Trying to take advantage of momentum in the USD/ZAR over the next few days of trading will be attractive, but speculators need to understand the speed of Forex will be fast.
- Tranquil conditions may be seen over the next twenty-four hours as financial institutions become very cautious, but this veneer of calm will disappear.
- The price range of the USD/ZAR is likely to become wide, and a test of known support and resistance levels should be expected.
USD/ZAR Short Term Outlook:
Current Resistance: 17.54400
Current Support: 17.50850
High Target: 17.65090
Low Target: 17.41970
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