- As the month of October gets ready to start, backers of the South African Rand can actually point to the currency as one of the best performing majors against the USD.
- The USD/ZAR is near the 17.25250 mark early this morning with its always wide spread being displayed, and the price action in the currency pair has been able to produce a rather consistent lower realms.
- However, the USD/ZAR is not only near important support at this time, but a large storm will threaten Forex short and near-term which will cause volatility in the USD/ZAR.
While many technical analysts may not want to know about such things, the U.S government appears ready to be shutdown as the Democrats and Republicans clash over a spending bill which would keep the U.S government open. There have been government shutdowns before, this is a political game. Financial institutions have dealt with U.S shutdowns, but large investors and big players will not like the idea of a stalled government and this will create volatility across the board in Forex and equities.
USD/ZAR Lower Depths and Looking for Additional Movement
The USD/ZAR has done a solid job of correlating to the broad Forex market, but intriguingly the South African Rand has been stronger than many major currencies. Not only has the USD/ZAR been able to produce a bearish trend for the past two months (with reversals higher obviously being seen too occasionally). But the currency pair – via the South African Rand – has held onto its lower realms, the same can not be said for the EUR and GBP which have lost some value.
No, the South African Rand hasn’t suddenly become the favorite currency of global markets, but its ability to remain within lower depths as other major currency pairs have given up value is rather remarkable. The 17.25250 realm does have important long-term support that appears ready to be confronted. The 17.06000 level was traded in at the end of September 2024. But the last time the USD/ZAR has seen sustained price action below 17.0000 was in December 2022 and January 2023. And these lower values may be a step too far.
Realistic Viewpoints Versus Overly Ambitious Notions
Traders need to remain realistic regarding short and near-term goals, particularly as the U.S government shutdown looms. While the U.S Federal Reserve cut its interest rate in September as anticipated, and the U.S Central Bank is expected to cut again in late October, these actions have likely been factored into the USD/ZAR already.
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- Financial institutions appear to be leaning into a bearish USD/ZAR, but they have also shown the ability to send the currency pair higher with velocity.
- The USD/ZAR was trading near 17.48700 this past Friday. And on the 4th of September the USD/ZAR was above the 17.74000 ratio.
- Perspective is important and traders looking for lower price action this week may want to keep their ambitions quiet in the coming days.
- The month of October is likely going to be challenging.
- Traders should also note that if the U.S government shutdowns that the U.S jobs numbers report will not be issued this Friday.
USD/ZAR Outlook for October 2025:
Speculative price range for USD/ZAR is 16.97000 to 17.68000
The beginning of October will be tricky not only for the USD/ZAR but the entire Forex market. Large players may seek safe haven trades in the coming days which means the USD could get stronger. Thus, if a trader still believes there is the potential of downside momentum in the USD/ZAR, but acknowledges the dangers of the U.S government shutdown, they may want to wait for the currency pair to reverse higher and then consider selling.
However, it is also likely going to prove dangerous to try and time when the political battle in the U.S will be resolved. Can the crisis be averted quickly or last into the weekend, or even beyond? Meaning the next week of trading has a lot to consider. While the Fed’s FOMC Statement at the end of October is supposed to be the key driver of Forex trading in the coming weeks, the shadow of the U.S government shutdown will cause problems.
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