The USD/ZAR has taken on a rather tight trading range the past week, while testing known lows and highs as financial institutions attempt to catch their breath and consider mid-term outlooks affecting short-term notions.
The USD/ZAR is traversing near the 18.25550 vicinity early this morning. The range between 18.30000 and 18.10000 the past handful of days has seen a rather solid test. Financial institutions have kept the USD/ZAR correlated to the broad Forex market. The USD has gathered some strength the past few days against other major currencies. However, volatility remains a distinct possibility under the current trading circumstances.
The USD/ZAR continues to trade within a sense of market uncertainty which is causing volatility to many financial assets. The South African Rand has generated a rather distinct bearish trend the past month and its ability to move lower is a healthy sign for the currency. Yet, support levels near the 18.10000 mark the past week have sparked buying. The question is if there is enough impetus in the USD/ZAR to bust through the lower support levels or if the known near-term trading range will remain prevalent.
Speculation on Breaking the Known Range
Technical traders may hold an advantage in the short and near-term with the USD/ZAR. Certainly there is plenty of fundamental news in the financial markets which is causing alarm, but the noise ringing is also causing confusion in financial institutions. Risk appetite within the current lower depths of the USD/ZAR may remain rather muted. There have been tests below the 18.10000 level in the USD/ZAR which were seen in March, but lower values near 18.05000 may prove to be wishful thinking near-term.
It is possible the technical range of the USD/ZAR may feel safe for larger players in the immediate future, which sets the table for the potential for the currency pair to bounce off of ‘accepted’ values which are viewed as equilibrium. Risk appetite and over-reaching seeking bigger moves are likely to remain limited near-term.
Betting Question of Resistance for the USD/ZAR
Interestingly for USD/ZAR traders is the perception that resistance levels higher may be the answer to speculative notions in the near-term. If the 18.26000 to 18.28000 hold back higher tides, betting on lower momentum developing when perceived resistance is touched may prove intriguing for wagers.
- The ability of the USD/ZAR to test lower values may feel tempting. Yesterday’s move higher in early trading to the 18.34000 vicinity was pushed back downwards.
- Plenty of international news will continue to create volatility in the broad markets in the short and near-term.
- Traders need to remain cautious regarding temptations to use too much leverage, particularly if they believe they ‘know’ what is going to happen next regarding larger unanticipated moves in the USD/ZAR.
USD/ZAR Short Term Outlook:
Current Resistance: 18.26800
Current Support: 18.24050
High Target: 18.31100
Low Target: 18.20100
Ready to trade our daily Forex analysis? Here’s a list of the best forex trading platforms South Africa to choose from.