The USD/ZAR is trading near the 17.61000 ratio as of this writing, which is within the lower realm of its near and mid-term values, this as USD centric notions continue to create some selling impetus.
Having traded near the 17.78000 vicinity early last week, the USD/ZAR has incrementally been sold lower the past handful of days. As this week begins the USD/ZAR is near the 17.61000 ratio depending on the bids and asks filtering into trading platfroms. The South African Rand remains correlated to the global Forex market well.
The USD/ZAR is near realms it traversed in early and late July. The USD/ZAR has shown the ability to trade below its current values, and in early and late July the 17.50000 level was flirted with by financial institutions. The notion that the Federal Reserve is going to cut interest rates in the middle of September has certainly sparked USD centric weakness.
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Pumping the Brakes on Overconfidence
Day traders who have been able to pursue the trend lower in the USD/ZAR have hopefully been rewarded. While it may be logical to wager on greater depths, traders need to understand intraday reversals and the potential of volatility remain realities that are dangerous. Speculators should not get overconfident about their targets and be willing to cash out profits when they occur. This instead of trying to build castles in the air and allowing sudden moves to disappear due to common price market action that are filled with ups and downs via miniscule moves, and too much leverage being used.
Economic data from the U.S will be watched this week, but most financial institutions will keep their eyes on the upcoming Fed Jackson Hole meetings towards the end of the week. The USD/ZAR has traded in a healthy manner compared to other major currencies and continues to pay little attention to the shadows that remain overhead regarding South African politics and its U.S trade talks.
17.60000 as a Barometer for the USD/ZAR Short-Term
Traders should not get stuck on trying to achieve a number because it looks attractive. While it may be appealing to want to cash out a selling position of the USD/ZAR near the 17.60000 level, if the ratio remains stubborn support, perhaps it will be better to cash out with a take profit order above this mark.
- Aiming for the 17.60800 area as an example is valid.
- Traders need to understand that numbers that are perceived as ‘even’ like 17.60000 create a lot of push back because of programmed trading being done by financial houses.
- However, if the 17.60000 level is able to be penetrated lower today and sustained, this could be a sign the lower marks seen in early and late July are then going to become targets by larger traders again.
USD/ZAR Short Term Outlook:
Current Resistance: 17.63100
Current Support: 17.60700
High Target: 17.66200
Low Target: 17.57200
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