Friday saw a fast rise upwards in the USD/ZAR which saw the currency pair touch the 17.97700 vicinity momentarily, as the weekend arrived the 17.89000 level was being traversed. Today’s early price action remains fast.
The USD/ZAR has seen a volatile reaction move the currency pair higher since Friday, the price action has correlated to the broad Forex market because financial institutions have turned cautious. President Trump has escalated his tariff rhetoric in the past handful of days and it is starting to have an effect. Like in late March of this year, the U.S White House is again making it clear nations need to negotiate or face higher price duties. South Africa has found itself directly in the mix of nations being mentioned.
After reading the above, some traders who have not looked at the price of the USD/ZAR may expect to see a Forex rate that is significantly higher, but it isn’t in actuality – the pair remains in a known range. The USD/ZAR as of this writing is near 17.88100 depending on the rather fast bids and asks being seen. A lack of huge volume makes trading in the USD/ZAR volatile in normal conditions, but today’s price action and near-term the currency pair may expect to see velocity that speculators are uncomfortable within.
18.00000 Challenged Late Last Week
There will be additional noise in Forex this week because of President Trump’s likely harsh stance regarding tariff negotiations as he proclaims the 1st of August as the deadline. But the USD/ZAR will also be affected by U.S inflation data tomorrow and on Wednesday. Also U.S Retail Sales numbers will come on Thursday of this week. Traders need to be braced for the USD/ZAR to produce quick reversals depending on the combination of threats listed.
Before going into the weekend the USD/ZAR was trading rather comfortably around 17.71000 as a support target that had been seen early last week and quite a bit on Thursday and Friday. However, as the U.S White House increased its noise regarding tariff penalties, and President Trump made it clear he would signal some nations out for stiffer duties, Forex began to shift nervously. The USD/ZAR was suddenly trading near the 17.97600 vicinity and challenging higher ratios.
Nervous Near-Term is a Certainty
Traders will need to practice calm thinking in the days ahead. Volatility is going to be seen in the USD/ZAR. While fast price action may produce opportunities, it can and will also result in dangerous velocity.
- USD/ZAR traders may believe the currency pair has been overbought, but looking for significant downward trends in the near-term may be wrong.
- Instead potentially looking for support levels to spur on more buying without getting overly ambitious about upwards price action may prove worthwhile wagers.
- USD/ZAR traders no matter the direction they choose in the short and near-term will have to use strict risk management.
- There are rather significant risk events lurking which could cause nervousness to rise in Forex and the USD/ZAR near-term, traders will be best served by remaining alert.
USD/ZAR Short Term Outlook:
Current Resistance: 17.88500
Current Support: 17.87000
High Target: 17.94200
Low Target: 17.85100
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