The USD/ZAR traded within site of 18.00000 yesterday this as the currency pair correlated to growing nervousness ahead of the Fed’s interest rate statement this evening, and the anticipated tariff rhetoric that will play out over the next couple of days. While the U.S, Japan and the E.U have seemingly produced agreed upon trading mandates, a host of other nations are still trying to define terms and South Africa is among them. South Africa has asked for more time to reach an agreement and it is uncertain if the U.S White House will grant this wish.
However, before day traders read too much into tariff concerns and the results in the USD/ZAR, they need to note that the recent bullish action which started on the 23rd of July has mirrored a lot of trading for other major currencies paired against the USD. The USD/ZAR will likely become volatile over the next handful of hours before Jerome Powell releases the Fed’s FOMC Statement. Some traders may be tempted to believe the currency pair looks overbought, but the near-term may continue to produce choppy elevated conditions.
Sentiment Shifts and the USD/ZAR Waters
Trading in the USD/ZAR has been quite comfortable in July. There have been tests of resistance and support levels, but the 17.47000 ratios were tested in the first week of the month and again only a handful of days ago. Reversals higher have certainly been seen, but some volatility in the South African Rand is a given and its results have also frequently demonstrated solid resistance slightly below the 17.90000 vicinity with occasional outliers higher.
The USD/ZAR is trading near the 17.86800 ratio as of this writing and fluctuations are showing a wide spread, this as financial houses brace for the Fed interest rate policy statement. The ability of the currency pair to be close to its highs appears to be risk premium being priced into the USD/ZAR, but again, this is being seen throughout the Forex market. Sentiment shifts have been rather tame up until a handful of days ago, this when the USD started to see buying momentum increase.
The USD/ZAR Remains in a Known Range
The USD/ZAR remains in a well-practiced Forex range and if the currency pair maintains resistance levels below the 18.00000 level in the next few days this might be a good sign for potential bearish activity to redevelop.
- South Africa will have to escape the next few days of potential tariff rhetoric unbloodied.
- Depending on the level of attention South Africa gets from the U.S White House on the 1st of August, financial institutions will have a decision to make regarding their outlooks for the USD/ZAR.
- Some institutions may believe the USD/ZAR is overbought.
USD/ZAR Outlook for August 2025:
Speculative price range for USD/ZAR is 17.35000 to 18.17000
It is a legitimate question to wonder if the South African Rand could face financial institutions wrath if no progress has been made on tariff talks, and South African and the U.S get into a loud shouting match. However, that is unlikely – calmer heads are likely to be heard. If the USD/ZAR goes above the 18.00000 level in the next few days and into early next week, this could turn into a selling opportunity depending on timeframes and the potential for political debate to be soothed.
The ability of the USD/ZAR to challenge the 17.50000 market a couple of times in July may be too ambitious a reversal lower for most day traders who need to get quick results. If the USD/ZAR remains near the 17.85000 ratio and shows signs of going lower via active bids and asks, it would not be surprising to see the USD/ZAR again traverse the 17.70000 to 17.60000 ratios in the coming weeks, and perhaps even lower. The Fed interest rate policy will certainly affect the USD globally in Forex later today and into Thursday. If South Africa can withstand tariff noise in the coming days, then it is likely the USD/ZAR will correlate with the broad Forex market with relative comfort in August.
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