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The USD/ZAR is correlating to broad Forex conditions as the USD has gained a significant amount of strength in the past couple of weeks.
As of this writing the USD/ZAR is near the 18.63000 ratio with rather fast nervous trading being displayed. Speculators considering a position in the USD/ZAR are warned to use entry price orders so they do not kill on the ‘fill’. Last week at this time the USD/ZAR was trading around the 17.67000 mark and had experienced rather volatile conditions from the 24th until the 28th of July. Hopefully, the churning waters of the USD/ZAR starting two weeks ago helped prepare speculators for what ensued last week regarding its sudden climb.
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The USD/ZAR is correlating to broad Forex conditions as the USD has gained a significant amount of strength in the past couple of weeks. While it would be much easier to say the USD has gained momentum because of solid economic conditions, the overriding fact may be that the USD has gathered upwards price action because risk-averse sentiment is strong currently. The USD/ZAR broke the 18.00000 level on Tuesday of last week and has sustained prices easily above this mark.
The price momentum higher last week from Monday until Wednesday produced a significant amount of velocity. By the 2nd of August the USD/ZAR was trading near the 18.60000 ratio, touching values it had last seen on the 11th of July.
Technical traders who are looking for perspective regarding mid-term price movement can see the USD/ZAR has returned to within sight of one month higher prices, but it must be said the currency pair is below the highs reached on the 6th of July when a value of 19.15000 was challenged. Record highs for the USD/ZAR were made on the 1st of June when the Forex pair touched the 19.92000 realms momentarily. Those higher realms still feel a distance away and unlikely to be seen in the near term.
Broad Forex sentiment is still showing signs of nervousness and the USD/ZAR is reflecting this volatility. Support near the 18.50000 mark should be watched in the short and near-term to see if this level proves durable. If the USD/ZAR remains above this mark over the next couple of days before U.S inflation data begins to be published on Thursday and Friday of this week, this could mean an additional test higher could be demonstrated. A break below this mark could mean a test of the 18.40000 support level.
- Having gained a considerable amount of value the past week, traders should not be overly ambitious regarding targets in the USD/ZAR, but they should protect their positions with stop losses to guard against volatility.
- The USD/ZAR trading conditions have been tense, but this has been experienced in other major currency pairs also. Traders should use quick-hitting targets if they choose to pursue the USD/ZAR in the near term.
Current Resistance: 18.64000
Current Support: 18.52100
High Target: 18.71600
Low Target: 18.44300
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