The USD/ZAR has stayed within the lower end of its near and mid-term technical charts even as there has been some negative news starting to involve the U.S and South Africa.
The USD/ZAR is trading near the 18.21500 ratio as of this writing, which is a value still situated in the lower end of the currency pair’s one week, one month, and three month range. The USD/ZAR continues to prove it has the ability to correlate to the broad Forex market and did touch a low around the 18.13465 ratio on Friday. The ability of the USD/ZAR to remain in the lower part of its price range and challenge support levels and even make them look vulnerable is intriguing.
Circumstances about the relationship between the U.S and South Africa escalated this weekend, when the U.S State Department declared the South African ambassador persona non grata. The move to kick the South African diplomat out of the U.S is another troubling development politically between the two nations. However, financial institutions have not reacted to these tremors of growing discord nervously, at least not yet.
Support Levels and Speculative Timeframes for the USD/ZAR
While behavioral sentiment continues to move the USD/ZAR within the lower boundaries of the currency pair’s value, day traders should monitor news occasionally regarding dialogue between the U.S and South Africa. The ability to traverse near the 18.13450 vicinity late last week was important, but the USD/ZAR could not break below prices seen on the 6th and 7th of March when the 18.10000 level was penetrated.
And before sellers get over confident about seeing more momentum lower, they should note the USD/ZAR is traversing values it traded in the middle of December. The USD/ZAR traded close to the 17.50000 level periodically in September, October and November. Day traders need to be careful as USD centric weakness seems to remain a flavor in the broad Forex market, but issues percolate between the U.S and South Africa.
Behavioral Sentiment and the USD/ZAR
Two perspectives can be taken regarding these numbers. One, financial institutions are correlating the USD/ZAR to the broad markets and lower values are possible. Or two, the USD/ZAR is bouncing up against support levels which will continue to prove durable because of shadows concerning the U.S and South African political relationship.
Resistance levels above should be watched as a barometer regarding potential nervousness in the USD/ZAR escalating.
If the 18.30000 level suddenly starts to get tested and the higher values do not correlate to the broad Forex market this would be a bad sign for the South African Rand.
However, if the 18.18000 to 18.15000 support levels find they are being flirted with, perhaps some near-term lower movement will actually develop and another test of the 18.10000 could be seen.
USD/ZAR Short Term Outlook:
Current Resistance: 18.21900
Current Support: 18.18300
High Target: 18.33100
Low Target: 18.14900
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