The USD/ZAR has remained within the higher part of its near-term range, as a lack of clarity continues to cause nervous outlooks for the South African Rand.
The USD/ZAR has maintained the upper limits of its price range for almost a solid week. The USD/ZAR has certainly shown the ability to reverse lower, but this has been followed by rather steady buying. Domestic political concerns in South Africa and a lack of clarity regarding what will come next from the U.S Federal Reserve are causing nervous sentiment. Financial houses seem to be leaning towards a cautious approach as they hold positions of the USD/ZAR.
The past week in South Africa has seen a heightened state of accusations towards the ruling government with the perception that some politicians may have a direct hand in corruption regarding the nation’s inability to deliver reliable energy. The inability to provide a stable source of electricity in South Africa hurts its corporate production and the workforce. While ‘load shedding’ remains in the headlines within the nation, the global banking saga continues to cause problems in Forex and this is affecting the USD/ZAR also.
- Questions remain unanswered regarding what the U.S Federal Reserve will do regarding its Federal Funds Rate this coming Wednesday.
- Fears about potential knock-on effects within the global banking sector are potentially causing some financial houses to look for safe havens, including the USD possibly.
- The U.S. Federal Reserve may increase the Federal Funds Rate by 0.25% on Wednesday, and this potential combined with its monetary policy rhetoric which will follow its FOMC Meeting on the 22nd of March is causing nervousness because of the unknowns.
The rather stubborn price range of the USD/ZAR the past few days which has hovered near its highs is not surprising, but what may prove to be technically intriguing is the inability of the USD/ZAR to challenge previous highs seen in the middle of last week near the 18.50000 realms. Perhaps this indicates that some financial houses are playing a wait-and-see game with the USD/ZAR. The lack of clarity regarding the U.S. Federal Reserve, and a healthy amount of caution regarding developing financial news concerning the global banking situation in Europe and the U.S. are legitimate reasons for a conservative approach.
Traders who choose to participate in the USD/ZAR in the short term are urged to use their risk-taking skills wisely. What may appear to be rather calm trading conditions in the USD/ZAR could suddenly find a dose of dynamic impetus hitting the Forex pair over the next few days without any warning. Looking for slight selloffs to be followed by reversals towards resistance may linger short-term until more clarity is provided.
Current Resistance: 18.50000
Current Support: 18.43000
High Target: 18.64900
Low Target: 18.29200
