The USD/ZAR climbed to values on Tuesday not seen since the coronavirus impact of 2020, the currency pair came within sight of the 17.20000 mark yesterday.
As of this morning the USD/ZAR is trading near the 16.97000 mark in relatively consolidated action as financial houses try to find equilibrium after yesterday’s encounter with long term highs. Tuesday’s apex of nearly 17.19009 had not been seen since September of 2020, this as coronavirus was still having a negative impact on the South African economic outlook. Nowadays South Africa is dealing with inflation, and ‘loadshedding’ – which is an official government policy of rolling blackouts throughout the nation.
Take advantage of great ZAR trading opportunities now!
USD/ZAR Caught in a Solid Bullish Trend Technically and Fundamentally
Yesterday’s volatility may have been sparked by whispers that a potential interest rate hike from the South African central bank this July may not be as large as anticipated. However, the price volatility experienced yesterday was certainly also in response to the notion the U.S central bank could remain aggressive. Inflation data will come from the U.S later today which will impact Forex, including the USD/ZAR and traders will need to be ready for the possibility of spikes.
The 17.00000 if Surpassed with a Sustained Move Could Spur Additional Buying of the USD/ZAR
If the USD/ZAR climbs above the 17.00000 in the short term and sustains value above this mark for a duration, this could ignite more buying of the currency pair. The upwards trend of the USD/ZAR mirrors the broad Forex market and the South African Rand could lose more value near term. While technical considerations are important, coupled with concerns about the greater intensity of loadshedding and its impact on productivity in July and August the USD/ZAR may find additional impetus to remain bullish.
USD/ZAR currency pair is within sight of long-term highs and its bullish trend remains durable.Interest rate concerns and electrical outages effecting economic production are troubling the USD/ZAR outlook.
From a risk reward perspective, speculators may want to consider buying the USD/ZAR on slight dips in value which challenge technical short term support levels. Yesterday’s move to long-term highs may not be the last time the USD/ZAR currency pair will traverse near the 17.20000 value. Traders need to keep their expectations realistic short term and use tactical risk management. Going long the USD/ZAR with the expectation a move above 17.00000 is a possibility may prove a worthwhile wager.
USD/ZAR Short Term Outlook:
Current Resistance: 17.04000
Current Support: 16.90800
High Target: 17.20100
Low Target: 16.76000