USD/ZAR Analysis: Return to Important Support Levels for Speculators – 16 September 2024

The USD/ZAR has opened this morning’s trading continuing to press up against important support levels which have been tested near the 17.65000 vicinity the past month.

-- The USD/ZAR was able to trade lower last week and as of this morning the currency pair is near the 17.67500 ratio with rather wide bids and asks being demonstrated on the screen.
-- The USD/ZAR exchange rate is once again near important support which has been tested almost on a weekly basis since the third week of August.
-- Early trading this morning as financial institutions emerged from their weekend saw the 17.65500 vicinity get some price action.
The USD/ZAR remains correlated to the broad Forex market and USD centric weakness is driving the bearish trajectory. However, the fact that the 17.65000 to 17.60000 price realm has proven rather durable support the past handful of weeks also points out that financial institutions believe the USD/ZAR is within a potentially comfortable level. It could be argued technically that the current price is a healthy equilibrium and that is a fact, but the shadow of the U.S Federal Reserve lurks this Wednesday.

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USD/ZAR and Challenges for Speculators Coming

The USD/ZAR has seen rather fast reversals higher the past handful of weeks too. This has occurred because financial institutions while certainly more optimistic about the outlook for South Africa, still remain focused on the U.S Federal Funds Rate and this creates nervousness. The U.S central bank will cut its interest rate this Wednesday. However, there is a disagreement about whether a 0.25% or a 0.50% cut is going to be delivered.

Until clarity is delivered regarding the Fed’s decision this coming Wednesday traders of the USD/ZAR need to brace for sudden price velocity, reversals will be displayed, and speculative analysis is going to create a lot of noise. The ability of the USD/ZAR to trade lower this morning suggests that some financial institutions may believe the Fed at a minimum is going to sound dovish and suggests another rate cut will cut in November.

Volatility and Near-Term USD/ZAR Trading

While current lows are being tested it may prove difficult for the USD/ZAR to traverse too deeper depths in the short-term. Some speculators may believe current support levels will serve as an ignition for quick hitting wagers upwards that try to take advantage of technical perceptions.

-- Traders need to practice risk management and conservative leverage.
-- Leading into Wednesday’s Fed decision trading in the USD/ZAR likely means the next day and a half will remain choppy.
-- Current lows may look like a reasonable value for USD/ZAR traders, but the current price realm may vanish after Wednesday’s U.S Fed FOMC Statement.
USD/ZAR Short Term Outlook:

Current Resistance: 17.68100

Current Support: 17.65900

High Target: 17.70900

Low Target: 17.61900

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