The USD/ZAR has begun this morning’s trading challenging low water marks and has attained a solid bearish near-term technical perspective, but concerns are starting to arise again regarding stability.
The USD/ZAR is traversing near the 18.34550 ratio as of this writing which is within the lower part of its near-term range, and also flirting with the month’s lowest values. The USD/ZAR has accomplished a polite bearish trend since last Wednesday’s highs when the 18.60000 ratio came within sight. The broad Forex market has shown USD centric positions hinting that financial institutions believe the USD has been overbought.
But while lows in the USD/ZAR are being produced early this morning, there are concerns starting to emerge which could cause some nervousness to once again filter into the South African Rand. Political uncertainty has started to be whispered as the coalition government failed to agree on a rise in the VAT last week. And not to be outdone regarding detrimental news, loadshedding once again started in South Africa this past weekend.
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USD/ZAR Near-Term Speculation
Support levels will be intriguing in the coming hours for the USD/ZAR. The 18.34000 to 18.33000 ratios may prove to be a lynchpin for some speculators who choose to look for upside. Early this morning it needs to be pointed out the 18.29000 vicinity got some price action. However, since hitting those lows the USD/ZAR has shown upside momentum. As financial institutions begin to operate in full in the coming hours it will be important to see if signs of nervousness begin to arise.
The USD/ZAR has done well since the early February. Yes, the USD/ZAR did traverse a high of nearly 19.04000 on the 3rd of this month, but that was because of a global reaction to broad Forex gyrations caused by the Trump administration’s rhetoric about tariffs. While the knowledge of loadshedding again starting to be seen in South Africa is significant, financial institutions may prove to be patient in the near-term to see if the cuts in electricity prove to be a problem that is taken care of promptly. Meaning the USD/ZAR may continue to correlate with broad Forex sentiment near-term.
Outside Considerations Including U.S Data
Traders looking for more downside in the USD/ZAR should be careful. If there is upside movement in the USD/ZAR short and near-term it will be important to see where resistance proves durable, a move above the 18.40000 level could raise suspicious eyebrows. If the USD/ZAR were to start going higher and not correlate to the broad Forex market then this would be a sign domestic financial institutions in South Africa are becoming more cautious.
- However, if the USD/ZAR remains locked into a direct correlation with the global Forex market, then traders will start to focus on U.S results on Wall Street today.
- U.S equity indices have seen strong selling the past couple of days and if markets continue to decline in the U.S this could spark some USD risk adverse buying.
- The U.S will also issue GDP numbers this coming Thursday.
USD/ZAR Short Term Outlook:
- Current Resistance: 18.36500
- Current Support: 18.34000
- High Target: 18.43000
- Low Target: 18.30100
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