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Short-Term Lows with Potential of Volatility Ahead


With risk events on the calendar tomorrow via Federal Reserve rhetoric, and jobs data this coming Friday, the USD/ZAR is likely to remain rather choppy near-term and perhaps practice a consolidated range until more clarity is delivered via U.S economic insights.

The USD/ZAR has been able to sustain its lower short-term price range in early trading this morning, but traders must prepare for additional choppy price velocity to develop.

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The USD/ZAR has traded near its short-term lows as the week has begun and this is likely a relief to financial houses that are hoping for more calm days ahead.  However, it is very possible that the near term will produce additional volatility for the USD/ZAR, and speculators will have to gauge their technical perceptions and behavioral sentiment.

The brief demonstration early this morning of stable prices in the USD/ZAR should be monitored closely. As of this writing the currency pair is near the 18.1500 ratio, but this should not be expected to last. The ability of the USD/ZAR to remain near what can be considered important support may be impressive, but speculators who have been pursuing upwards momentum may be tempted to look for reversals higher off of current values.

Traders may consider the possibility that the worst of the U.S. Federal Reserve outlook regarding monetary policy has been digested within the USD/ZAR. Fed Chairman Jerome Powell will testify in front of the U.S. Senate tomorrow.  The U.S. central bank chief will certainly do his best to deliver calm words and not stir the broad marketplace into a frenzy. However, he will certainly be asked about his thoughts regarding inflation and interest rate policy moving forward. And as Non-Farm Employment Change data await on Friday, traders still may be delivered surprises regarding U.S growth and inflation numbers.

  • The lack of a serious reversal upward in the past couple of days of trading in the USD/ZAR is intriguing and may be attractive for traders looking for buying action to develop.
  • South Africa remains within the grasp of dire circumstances regarding electrical supply, and long rolling blackouts will be a problem until a change of government policy is implemented and criminal corruption ceases.
  • Load shedding is unlikely to end during 2023.

Resistance targets of 18.17000 to 18.19000 appear attractive for quick-hitting buying targets. Readers should check the current price of the USD/ZAR as they are reading; if momentum upwards is being generated price targets slightly above the 18.20000 realms may be appealing also as wagers.

With risk events on the calendar tomorrow via Federal Reserve rhetoric, and jobs data this coming Friday, the USD/ZAR is likely to remain rather choppy near-term and perhaps practice a consolidated range until more clarity is delivered via U.S economic insights. From a risk-reward perspective, there appears more reason for the USD/ZAR to traverse with greater velocity toward the upside, compared to the downside where support around the 18.13000 to 18.11000 realms looks durable near term.                                                                                                      

Current Resistance: 18.16910

Current Support: 18.12210

High Target: 18.23890

Low Target: 18.04830

USD/ZAR

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