Today’s values do not reflect the whole USD/ZAR storyline, short and near-term technical traders may feel like the currency pair has delivered rather strange results the past couple of weeks. Yes, the broad Forex market has been its regular volatile self in many respects, but the lingering cautiousness coming from financial institutions which has developed appears to be waiting for results in which outlooks remain less than clear. In other words due to the fact there are conflicting viewpoints the USD/ZAR and other Forex pairs are delivering a sputtering display of moves that are creating tension.
USD/ZAR Trading Remains Difficult for Short-Term Positions
After showing an ability to move lower last Wednesday and Thursday and traverse mid-term depths the USD/ZAR has returned to higher values which were seen one week ago. Spreads remain wide and the USD/ZAR remains seemingly always ready for an impetus push from afar. Financial institutions while having shown some cautious behavior via yesterday’s global assets have pushed some of the major equity indices towards intriguing highs – particularly U.S indices.
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USD centric weakness remains when mid-term technical charts examined, but intraday reversals and trends for short and mid-term speculators remain difficult to grasp. The USD/ZAR has not produced an easy to define trading landscape for those seeking to pursue quick hitting wagers, yesterday’s results and this morning’s price action serve as examples.
Weekly Highs Highlight a Possible Shift in USD/ZAR Sentiment
As of this morning the USD/ZAR is near the 16.26000 level depending on the bids and asks being generated. The ratios being seen now are the high for the past week of trading, yesterday’s results took the USD/ZAR upwards. However, last Tuesday which did display relatively similar values (a bit lower around the 16.24000 vicinity for a while) then saw a steep drop lower on Wednesday and the 16.06850 area was briefly challenged. Yes, a wave upwards started to develop sometime on Thursday and since then has pushed the USD/ZAR higher again.
However, before traders overreact to the current levels of the currency pair they should note that this dance has been seen before. Current values remain within the lower elements of mid-term charts depending on perspective. And while higher ratios have certainly been seen, technical interest in potential reversals lower cannot be faulted by those considering possibly lower values.
Intraday Volatility Returns as Markets Reassess Fed Expectations
Financial institutions are almost admitting they are less than comfortable with their mid-term outlooks regarding the U.S Federal Reserve. The inability to place their cash positions within comfortable allocations is causing choppy short and near-term price action. However, USD/ZAR traders and other Forex speculators may actually welcome these conditions if they continue to flourish.
The broad Forex market had become rather boring for many speculators the past couple of years who complained openly about a lack of intraday volatility. Sudden conditions the past month have started to display price action which made the Forex market attractive to many speculators in the past. The intraday dance the USD/ZAR is showing, including the move to a lower realm but then followed back to higher terrain may prove important from a speculative sense.
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Technical Signals Matter as Fundamental Clarity Remains Limited
The past week of technical price movement in the USD/ZAR should make traders concerned about their risk management techniques. The lows seen on Wednesday of last week and the upwards climb back to today’s highs should serve as a warning regarding the ability of the USD/ZAR to change directions. As long as the value realm of the currency pair remains within a known realm however, this makes the USD/ZAR rather intriguing to pursue technically. Current conditions certainly still need fundamental understanding of what is taking place with economic data and what is happening in the world, but anticipating changes based on sudden sentiment shifts caused by financial institutions lack of clarity is a technical advantage.
Risk Management Remains Central in Choppy USD/ZAR Trading
Results from the past week of trading in the USD/ZAR serve as easy evidence for speculators not to get married to any near-term notions about a permanent direction. The choppiness displayed in the broad Forex market while still showing USD centric weakness overall is attractive, but the intraday volatility still produced leaves little room for trust. Pursuing the USD/ZAR may feel worthwhile for day traders but traders are urged to use strict tactics that protect their cash.
USD/ZAR Levels to Watch in the Near Term
Current Resistance: 16.26500
Current Support: 16.25200
High Target: 16.30100
Low Target: 16.22500
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