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The USD/ZAR is touching values it has not traded since the 19th of December; this is after a wave of strong buying erupted before going into the weekend and continues.
The USD/ZAR is challenging mid-term values not seen since the third week of December. As of this writing the USD/ZAR is near the 17.50000 mark and for the time being slightly below this level. The psychological impact of the 17.50000 could prove to be important if the value is sustained above this ratio because it would be a reminder of the realms the USD/ZAR traded in November when long-term highs were seen.
Yes, the USD/ZAR did trade near similar highs at the end of January, but the ability to break above these price levels in early trading this morning indicates resistance could be vulnerable. U.S Non-Farm Employment Change statistics this past Friday came in much stronger than expected this fueled buying of the USD/ZAR as a reaction.
USD/ZAR Short-Term Technical Correlations Exhibited with Broad Forex Market
The USD/ZAR has correlated to other major currencies over the past handful of days, which is a healthy sign. The stronger USD has been demonstrated across Forex. The question for speculators now is if the USD/ZAR will begin to show evidence the currency pair has been overbought. Having touched values not seen since the 19th of December, a healthy sign for the South African Rand would be a slight reversal lower developing as financial houses search for equilibrium. However, there is reason to be worried this will not happen so quickly.
Nervous Behavioral Sentiment Engulfs the USD/ZAR
- USD/ZAR short-term traders should monitor the 17.50000 mark closely, if this price sees sustained trading above it could be an indication that more buying could still be seen and that expectations are targeting the 17.55000 to 17.60000 ratios.
- If the USD/ZAR is able to trade below 17.50000 in the short-term and flirt with support levels near 17.47000 to 17.44000 this could calm nervous financial institutions and spark selling of the currency pair which could challenge the 17.00000.
The stronger-than-expected U.S jobs numbers on Friday fueled the buying of the USD/ZAR, but nervous domestic issues in South Africa continue to also create a likely support area for the currency pair that should be considered. Short-term trading is likely to be choppy as speculative forces try to find some equilibrium in the USD/ZAR. The near-term should be treated cautiously as the Forex pair tries to assert a direction
USD/ZAR Short-Term Outlook:
Current Resistance: 17.51400
Current Support: 17.41700
High Target: 17.60400
Low Target: 17.29300
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