The USD/ZAR has opened trading near the 17.69500 vicinity and is showing early fluctuations still within the lower elements of it range, this as the broad Forex market has lost some value to the USD.
The USD/ZAR turned in a rather curious performance last week as it came off of nervous highs approaching the 17.96100 vicinity and is now around the 17.69500 level with fast bids and asks being demonstrated. After turning higher on the 3rd of July when the 17.46400 ratio was challenged, and testing the 17.96000 to 17.97000 tier from around the 11th of June until last week, the USD/ZAR has turned lower again.
The reason why the recent price action is interesting is because of the ability to create a downturn in the USD/ZAR when the broad Forex market is still exhibiting nervousness. Major currencies have not done well against the USD in recent trading, this since touching apex highs in early July and seeing value erode. Perhaps financial institutions simply felt the USD/ZAR had been overbought and are responding to this notion with some selling pressure.
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Support Levels and Speculating on Potential Reversals
On Friday the USD/ZAR flirted with 17.66000, this after spending much of last week above the 17.80000 ratio. This morning’s lows touched the 17.63000 level (there was a momentary spike even lower – which quickly vanished), but after moving lower on early trading the USD/ZAR has reversed higher. Which may signal technically for the moment financial institutions are searching for equilibrium as they brace for a storm.
The broad Forex and equity markets globally remain rather cautious. Reactions are likely to see swift changing winds in financial assets for the next couple of weeks. The Federal Reserve is expected to plead for more patience regarding interest rate cuts on the 30th of July, this if Jerome Powell remains opposed to President Trump’s push for a lower Federal Funds Rate. And there is a tariff shadow looming as the 1st of August deadline draws closer. South Africa may also find itself within President Trump’s loud rhetoric in the coming days and weeks.
Technical Perspectives and Betting on the USD/ZAR
Traders should brace for choppy conditions in the USD/ZAR short and near-term. Speculators who mix behavioral sentiment perspectives with technical insights may believe looking for reversals higher when the currency pair explores lower realms may be attractive.
- The USD/ZAR is likely to see price velocity become a fixture of its trading in the days ahead. Risk management will be essential.
- Some traders may believe values below the 17.70000 level may represent oversold conditions until more clarity is delivered via the U.S Fed and tariff negotiations.
USD/ZAR Short Term Outlook:
Current Resistance: 17.70600
Current Support: 17.69200
High Target: 17.76100
Low Target: 17.66300
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