[ad_1]
The USD/ZAR as of early this morning is trading slightly above the 18.00000 level as the currency pair continues to demonstrate weakness.
On Friday of last week, the USD/ZAR climbed above the 18.29000 level momentarily in the aftermath of the higher-than-expected inflation report from the U.S. via the Producer Price Index which was published on Thursday. However, in the immediate wake of the PPI numbers from the U.S., the USD/ZAR had climbed to only about 18.22400 the day before on Thursday. While the USD/ZAR appears to be trading in a correlated fashion to the broad Forex market, there are other factors at work within the Forex pair helping spur new highs.
The USD/ZAR like other currency pairs has entered a bullish trend since the early days of February; this too correlates with the U.S. Federal Reserve monetary policy rhetoric, and strong job numbers show the U.S. economy remains more robust than anticipated. The other factor speculators may want to acknowledge is that domestic economic issues in South Africa remain troubling and this may help the USD/ZAR find a stronger amount of support technically. As of this writing the USD/ZAR is near the 18.04500 mark.
USD/ZAR Sustains Value above the 18.00000 with Incremental Higher Values
The USD/ZAR on early Monday last week climbed above the 18.00000 level and touched the 18.0800 mark. On Wednesday of last week, the USD/ZAR climbed to roughly the 18.10000 level briefly, this was followed by additional incremental highs on Thursday and Friday as remarked upon above. The point is that fresh highs in the USD/ZAR continued to be demonstrated last week.
Yes, the USD/ZAR did reverse lower before going into the weekend, but it stayed above the important 18.0000. The combination of a perceived more aggressive U.S. Federal Reserve and troubling domestic issues in South Africa may continue to create nervous buying sentiment of the USD/ZAR.
Near-Term Choppiness likely as Behavioral Sentiment Remains Nervous
- On Thursday of this week, the U.S. will publish Preliminary GDP data, if the growth numbers are stronger than expected the USD/ZAR could climb higher as a reaction later this week.
- Stage 6 rolling blackouts in South Africa were announced late this weekend which will further harm economic production domestically.
- Heavy rains have been causing flooding over wide areas in the central-eastern part of South Africa.
If the USD/ZAR remains above the 18.0000 level with sustained force, traders may be tempted to buy the currency pair on dips that test technical support in the near term. Traders should be realistic regarding their targets, and risk management is essential. Using support levels to initiate buying positions and aiming to take profits around the 18.06200 to 18.08000 levels in the short term may prove worthwhile bets.
USD/ZAR Short-Term Outlook:
Current Resistance: 18.06600
Current Support: 17.98980
High Target: 18.22420
Low Target: 17.94300
[ad_2]