- The US dollar initially tried to rally a bit during the course of the trading session here on Wednesday, as the 17.50 ZAR level continues to offer significant support.
- That being said, we can’t hang on to gains, so then we have to ask questions as to whether or not we are eventually going to break down?
- If we do, meaning that we break down below the 17.40 ZAR level, then we could really start to see the US dollar fall significantly against the South African Rand.
Global Risk Appetite
Top Forex Brokers
If the global risk appetite continues to sputter, it is very possible that eventually we see this market turnaround, but as things stand right now, it looks like we are trying to form some type of inverted hammer. If we were to break above the top of the candlestick for the trading session, then we could go looking at the 50 Day EMA, near the 17.70 ZAR level. Above there, then we have the 17.80 ZAR level, followed by the 18 ZAR level which also has the 200 Day EMA sitting there. In other words, even if we do rally from here, I think there is a lot of work to do for the US dollar to truly embrace the bullish momentum.
On the other hand, if we do break down from here, I think we’ve got a shot at hitting 17 ZAR, perhaps even lower than that. The US dollar will continue to struggle at times, and there is an interest rate differential here to favor South Africa. That being said, this is a market that will also continue to see whether or not people are willing to jump further out on the risk spectrum to buy currencies, especially emerging market currencies like the South African Rand. Ultimately, this is a market that is at the bottom of a short-term trading range, so we’ll have to wait and see whether or not we can break out in either direction.
Ready to trade our Forex daily analysis and predictions? Check out the top forex trading brokers in South Africa worth using.