USD/ZAR is trading within the lower elements of the medium-term price range with a fairly healthy dose of reversals that may attract speculators.

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The USD/ZAR as of this writing it is near 18.02100 as of this writing. While it is easy to point out that 18,000,000 remains a key component from a technical perspective in the short term, the reason why the currency pair is lingering at the bottom of its price range is perhaps more interesting. USD/ZAR has mirrored the volatility and technical flow of other major currency pairs over the past few weeks.

The US Federal Reserve will release its decision on the federal funds rate this Wednesday, and this is sure to have an impact on the USD/ZAR trading range. While the Fed is widely expected to raise interest rates by another 0.25% on 26Thursday July, what the Federal Reserve says in its FOMC statement is completely unknown and causing jitters.

USD/ZAR has demonstrated a downtrend since climbing to a high near 19.15500 on the 7th.Thursday July. Experienced traders have occasionally noted the ability to traverse lower and with an element of quick price velocity, but the last ten days have actually brought a consolidated battle for bearish momentum. On the 13thThursday In July USD/ZAR traded near the 17.90000 ratio. This means that USD/ZAR has actually appreciated since this time a week and a half ago. Financial institutions are cautious for a while.

Day traders need to understand that the US Federal Reserve’s FOMC statement coming this Wednesday will cause immediate volatility in USD/ZAR. While the Fed Funds rate hike has already been absorbed in Forex, financial institutions will be keen to “hear” whether the Federal Reserve will indeed signal that they intend to go dovish.

The Fed certainly won’t say they’ve gone dovish outright, but if they say they’re considering holding interest rates over the medium term as inflation falls, that could create a selling spark in USD/ZAR. There are no guarantees and USD/ZAR day traders should wait for the Fed announcement if they don’t want to take full bets.

  • The 17.94k to 18.03k price range within USD/ZAR should be watched in the near term to see if it holds.
  • Traders who feel that USD/ZAR may have additional room to form a stronger bearish move lower should certainly use risk management.
  • Conservative traders may want to use moves towards resistance as a starting point for selling positions while looking to bet on small reversals below.

Current Resistance: 18.04100

Current support: 17.97100

High Aim: 18.07100

Low Target: 17.93010

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