The USD/ZAR appears set to enter the month of July traversing within the lower elements of its mid-term range, this as it straddles a value realm seen in the second week of December 2024.
The USD/ZAR hit a high of nearly 18.15000 as recently as last Monday, but the currency pair now is trading near the 17.74750 vicinity which is a price realm which last saw sustained trading in the second week of December. Also noteworthy, the USD/ZAR touched the 17.57800 vicinity this past Thursday as financial institutions leaned into USD weakness across global Forex markets.
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The high seen early last week was a direct reflection of nervousness because of the Middle East conflict and fear of escalation, but a reversal lower quickly generated upon the news of a ceasefire agreement between Iran and Israel. The lows seen last Thursday likely developed on the notion the U.S Federal Reserve will have to consider cutting interest rates over the mid-term. The USD/ZAR has been able to sustain its lower values and appears ready to enter July insight of important support targets.
South Africa and Optimistic Outlooks Considered
Financial institutions have been able to correlate the USD/ZAR to the growing belief over the past few months that the USD is going to become weaker. The USD/ZAR was trading at a high of 19.9500 on the 9th of April, this as global investors worried about the impact of President Trump’s tariff actions. Since the second week of April however, it has become clear financial institutions have become acclimated to the rhetoric from the U.S White House. Positive results from tariff negotiations between the U.S and other nations have also caused nervousness regarding tariffs to lessen. This has helped USD weakness.
Economic data from the U.S continues to show inflation has been tame over the past few months and that growth numbers are lackluster – even weak. This has helped cement the idea the Federal Reserve will have to announce in late July that they intend on cutting interest rates. The USD/ZAR has seen traction lower and it appears the 17.70000 may become an important near-term inflection point for Forex traders. While political debate regarding South Africa’s domestic affairs continue to be heard, the coalition government still appears rather capable of working together. This has also helped sentiment which has created a bearishness in the USD/ZAR.
One Month Perspective and the USD/ZAR
The USD/ZAR has done a solid job technically of being correlated to the broad Forex market. The USD/ZAR is now banging up against support levels which look like targets for financial institutions. If the USD/ZAR penetrates and sustains movement below the 17.70000 level, then the 17.60000 ratio will get a lot of focus.
- The ability of the USD/ZAR to go below the 17.60000 level last Thursday if a clear sign that some large players believe lower depths are ready to be explored.
- Resistance levels around the 17.90000 may prove to be rather durable in the near-term.
- However, impetus will be needed to perhaps sustain lower momentum.
- The U.S has a tariff deadline regarding the 9th of July and the results will cause a reaction in Forex around this date, which will test support and resistance values.
- Traders should be braced for volatility and price velocity to reappear in the USD/ZAR in the second week of July.
USD/ZAR Outlook for July 2025:
Speculative price range for USD/ZAR is 17.20000 to 18.10000
Lower momentum in the USD/ZAR has been clear. Yes, reversals higher have been seen. But the war that was fought in the Middle East starting on the 13th of June is likely to remain relatively calm. If global politics can remain tranquil the USD will be effected by U.S Federal Reserve outlook. The tariff news on the 9th of July will get a lot of attention, but it does appear most financial institutions have become experienced at dealing with the noise surrounding tariff developments.
If the USD/ZAR is still within the lower elements of its price range after the 9th of July, then it is likely the currency pair can sustain lower values throughout July and potentially set the table for a test of lower ratios. Traders should not get overly ambitious in their wagers and use proper risk management. If trading were to fall below the 17.50000 level and sustain values, then a retest of prices seen in October and November of 2025 are not out of the question technically when the 17.30000 to 17.75000 range was a playground for speculators.
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