The USD/ZAR has correlated to global Forex and seen its value demonstrate a rather robust bullish trend in the wake and aftermath of the U.S election which saw Donald Trump crowned as winner.
- The USD/ZAR is near the 18.23400 ratio as of this writing with a wide spread being offered because of the U.S Thanksgiving holiday underway and a lack of trading volume.
- However, by this coming Monday when December trading begins, full volumes will be seen and the USD/ZAR will react to the increase of transactions with potential volatility.
- Yet, the surges and reversals which were seen in November and likely hurt plenty of retail forex traders may start to subside.
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The election of Donald Trump as the incoming President for January certainly caused a reaction in Forex globally and the USD/ZAR reacted to the nervousness. The USD/ZAR was trading near the 17.38000 level on November the 5th and in the aftermath of the election results climbed to nearly 17.80000. However, volatility was not finished and then a move lower occurred to the 17.24300 vicinity on the 8th of November, and then a powerful reversal upwards began to take hold.
Volatility and Higher Values in the USD/ZAR
A high of nearly 18.39400 was challenged on the 14th of November in the wake of more nervousness being seen across global Forex. Importantly, the high reached in the USD/ZAR on that day challenged values seen in the second week of August, but never really challenged highs seen in early August when another Forex meltdown was occurring internationally because of USD/JPY fears. The point being that the USD/ZAR has done quite well in the past handful of months and has reacted in a healthy manner when compared with most other major currencies paired against the USD which has seen risk adverse strength build.
The ability of the USD/ZAR to trade in a rather tranquil price range the past two weeks should not be discounted. Financial institutions globally are still trying to figure out their mid-term outlooks. The USD/ZAR has traded between a range of nearly 18.05000 and 18.26000 with some outliers since the 15th of November. While financial institutions certainly remain nervous about incoming U.S policy changes, it is likely that calmer waters will begin to prevail. Yes, President-elect Trump does have the capability of producing dramatic displays of negotiation, but it is possible large institutions will once again become accustomed to his manner.
USD/ZAR Potential Tranquil Range and a Return to Norms
When trading starts in December for the USD/ZAR traders will be thinking about Trump, the Federal Reserve interest rate decision coming in the middle of the month, and the incoming Christmas holiday. All three will be factors in the USD/ZAR in the coming weeks.
- Having seen a bullish run higher in the past two months, traders may be tempted to look for downside.
- But betting on sustained momentum lower to develop with power in the coming weeks may be too wishful.
- Instead a test of the current price range may play out.
- Resistance levels may prove to be useful in the coming days and weeks, this if financial institutions believe the USD/ZAR has been overbought.
USD/ZAR Outlook for December 2024:
Speculative price range for USD/ZAR is 17.95100 to 18.36100
The USD/ZAR has seen plenty of price action in November and there is likely more velocity coming in December. However, the potential of calmer trading waters are intriguing. Financial institutions still have work to do when it comes to dealing with the changes to coming U.S economic policy which will affect international trade.
However, the thought that a lot of the fear has already been calculated into the stronger USD could propel some traders to think there are prospects of a downturn for the USD/ZAR to potentially emerge. Retail speculators however should remain cautious, Trump doesn’t take full power until the third week of January. Yet, it can certainly be said Trump’s pronouncements are affecting Forex, including the USD/ZAR already. Choppy conditions are likely in December for the USD/ZAR, but there may be room for a return to more tranquil trading ranges and an opportunity to wager on selling positions when technical resistance is tested.
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