The higher price range of the USD/ZAR has remained intact during the month of March, but its rather broad value realms above the 18.00000 ratios have likely kept many speculators anxious.
As the month of March gets ready to end and the start of April readies, the USD/ZAR certainly gave speculators a taste of adventure regarding their pursuit of the currency pair the past four weeks. Having reached a high above the 18.71000 mark on the 8th of March, after touching a low of nearly 18.06880 on the 1st of March, the USD/ZAR continued to provide a large rolling price range. As of this writing the USD/ZAR is situated close to the 18.10000 vicinities as the Forex pair has managed to fight lower again.
Before the government of South Africa tries to take credit for the better value of the South African Rand, it should be pointed out that global financial houses have begun to wager the U.S. Federal Reserve is going to have to become less aggressive regarding their interest rate policy. The USD has gotten weaker across the board against many major currencies, but yes the USD/ZAR is correlating to the broad market and this is a good thing for day traders who tend to make their bets based on behavioral sentiment mixed with technical considerations.
While global markets contend with the troubles and nervousness generated by the corporate banking sector in the U.S. and Europe, the USD/ZAR has been helped as the waters regarding the crisis have become calmer over the past couple of days. The potential for further developing news remains a consideration, but for now, the USD/ZAR seems to have traded based on the consideration the U.S Fed may consider a more dovish approach over the mid-term and the banking crisis may soften.
However, intriguingly the USD/ZAR remains above the 18.00000 level and this number can be considered a barometer for the currency pair. While the price of gold has been extremely strong over the past couple of months, the South African Rand has not performed well. In other words, considerations that the South African government continues to work under a cloud of suspicion regarding corruption and inability to deliver solid infrastructure is causing worries and hitting economic production in the nation harming the South African Rand.
- U.S. economic data should be monitored.
- If statistics regarding growth and inflation in the U.S. struggle this could help the USD/ZAR find some more selling based on the notion the U.S central bank will have to put the brakes on aggressive interest rate hikes.
- The USD/ZAR was trading at nearly 16.91200 briefly on the 2nd of February; showing if optimistic sentiment is generated towards selling positions the USD/ZAR could trade lower still. But danger lurks because of political unease and business capabilities in South Africa.
- Traders must not get overly ambitious and remember the USD/ZAR has not traded below the 18.00000 mark since about the 20th of February.
The speculative price range for USD/ZAR is 17.67000 to 18.73000
Traders pursuing the USD/ZAR are certain to find plenty of price action, and what makes the currency pair attractive from a wagering perspective is the combination of behavioral sentiment and technical factors. However, the currency pair remains volatile and can hit speculators with costly mistakes if their bets are not managed with care. Narrow price targets are urged in the USD/ZAR that can cash out profits when positions go in the chosen direction of the trader.
The USD/ZAR may have the ability to continue to produce some selling momentum in the weeks ahead, but news regarding the rolling blackouts of South Africa will have to remain tranquil and not grow worse. In addition to this need, the U.S. Federal Reserve will have to indicate that interest rate policy is going to change. If these two factors occur, the USD/ZAR could challenge the 18.00000 mark again and go below this target and begin to test lower support levels like the 17.90000 to 17.80000 ratios. However, the wide range of the USD/ZAR and its ability to track high above 18.00000 should not be forgotten.
The door is open to skeptics who believe troubles will remain in South Africa and the USD/ZAR will continue to be bought as concerns remain abundant. The lower prices now being touched by the USD/ZAR are intriguing. If the USD/ZAR refuses to trade substantially below 18.00000 in the coming days as April gets started in earnest, this might indicate nervous sentiment remains within financial institutions regarding the health of the South African economy.
While the USD/ZAR has correlated to the broad Forex market recently, it has also shown the capability to find buyers and press higher based on domestic issues in South Africa. If the currency pair extends higher and begins to test the 18.20000 to 18.350000 ratios and sustains this upper ratio, the USD/ZAR could be exhibiting that more buying will continue.
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