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The USD/ZAR is trading early this morning within the grasp of its higher short-term range, this after traversing over the 19.00000 level briefly on Friday.
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Before going into the weekend the USD/ZAR experienced a surge of volatile trading. The USD/ZAR seemed to be comfortably placed near the 18.73000 mark on Friday when the currency pair suddenly shot higher and crossed the 19.00000 ratio for the first time since the 8th of June. The USD/ZAR finished Friday’s trading with some selling and as Monday’s markets have begun the Forex pair is near the 18.79800 vicinity as of this writing.
The abrupt movement over the 19.00000 mark on Friday was a solid reminder the USD/ZAR can turn violent quickly. The USD/ZAR did experience a rather wide trading range last week, the low for the currency pair was delivered on early Tuesday when the 18.43300 ratio was touched.
The USD/ZAR has correlated to other major Forex pairs rather well recently and its climb higher last week and particularly on Friday mirrored the broad market. U.S. economic data has come in stronger than anticipated over the past week, and this has reignited the belief the U.S Federal Reserve will hike its Federal Funds Rate on the 26th of July once again.
While day traders watch and participate in the USD/ZAR today it will be worthwhile to note the U.S. celebrates Independence Day tomorrow. Because of Tuesday’s 4th of July holiday in the States, Forex markets today and particularly tomorrow will see much lighter trading volume and this will affect the USD/ZAR also. Traders should not be lulled to sleep, however, and they should remain aware that sudden bursts of activity could rapidly develop. Technically the USD/ZAR may use the 18.80000 level as a barometer in the short-term and target, but its price range may bounce back and forth.
- Day traders should use nearby targets for their wagers today and tomorrow, because of the lighter-than-normal trading volumes expected because of the U.S holiday.
- The USD/ZAR is trading within the higher elements of its near-term charts, but the value of the currency pair has correlated to other currency pairs as the USD has gotten slightly stronger.
After the U.S. holiday ends, trading volumes in Forex will return to normal. In the meantime, USD/ZAR traders should use adequate risk management to guard against the potential of surprising spikes. On Friday the FOMC Meeting Minutes will be released and offer more insights regarding the thinking of the U.S. Federal Reserve regarding its interest rate policy. The return to a seemingly bullish trend in the USD/ZAR may be tested over the near term, but the higher move may remain sustained over the next few days.
Current Resistance: 18.80600
Current Support: 18.75100
High Target: 18.90100
Low Target: 18.71300
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