Traders who feel the urge to wager on the USD/ZAR today should monitor developing news from the global financial landscape and be prepared for violent speculative waters.
The USD/ZAR has found solid momentum downward since Friday and is trading near the 18.14100 ratios as of this writing. Speculators who are unaware of the banking news which has developed in the U.S. since Friday are urged to be careful before dipping their toes in the trading world today. A vast amount of volatility is occurring and financial houses are trying to understand the broad markets without a lot of clarity. The behavioral sentiment is going to ‘rule’ in the near term. The USD/ZAR is moving fast like all of the major Forex pairs.
The collapse of an Important U.S Bank in the Center of a Storm Affecting USD/ZAR
Silicon Valley Bank essentially went broke late last week. The U.S. government via the U.S. Federal Reserve and Treasury have said they will step in and protect depositors’ money. However, that is not the end of the story. The USD/ZAR has been selling off because of behavioral sentiment regarding the U.S. Federal Reserve currently.
The problems surrounding the bank and the exposure it has caused in the broad marketplace because of potential knock-on effects have caused many financial analysts to assume the U.S. Federal Reserve will suddenly halt its interest rate hikes next week. But this is not guaranteed ladies and gentlemen. All speculators today and for the remainder of this week need to be extremely careful. If they want to trade the USD/ZAR narrow take profit orders should be used along with strict stop losses. Rhetoric from the U.S government will be loud and financial analysts will also be heard.
- The problems caused by the failure of Silicon Valley Bank will try to be fixed by the U.S Federal Reserve and Treasury.
- This will provide momentary help for the USD/ZAR, but the question is how long it will last.
- The fix by the U.S. government will make many people angry too.
- Traders should look for quick-hitting trades that try to take advantage of short-term trends. Dangerous choppy conditions could ignite very fast and speculators are cautioned to be extra careful.
The USD/ZAR is momentarily trading below values seen early last week as bearish sentiment is providing a downward impetus. However, traders should keep in mind the problems that exist in South Africa have not vanished, and the problems the U.S. Federal Reserve faces are likely to get worse in the coming days. Pursuing bearish perceptions in the short term may prove worthwhile, but traders must be prepared for whipsaw reversals to occur suddenly. Trading today and tomorrow will be like swimming with sharks. Speculators need to protect themselves.
Current Resistance: 18.25600
Current Support: 18.13400
High Target: 18.37900
Low Target: 18.08510