USD/ZAR Forecast: Looking for Support Near Major Moving Aver| MENAFN.COM

Tuesday, 18 January 2022 05:09 GMT

USD/ZAR Forecast: Looking for Support Near Major Moving Aver

(MENAFN- Daily Forex) The US dollar has gone back and forth during the trading session on Thursday as it looks like it is trying to find support against the South African Rand. We have seen a rather significant selloff in the US dollar against most currencies, so the South African Rand would not be any different. However, what is even more interesting about the South African Rand at the moment is the fact that the omicron variant had initially shown up in South Africa, so a lot of people ran away from that country. You can clearly see by looking at both the currency and the South African stock market that money is starting to flow back into that country.

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When you look at this chart, you can see that the 15.50 ZAR level has been interesting in the past, as it had been supportive, and now it should offer a bit of resistance. The 50 day EMA sits just above there, so it is very likely that we will continue to see a lot of noisy behavior in this general vicinity. Having said that, if we can break above that 50 day EMA it should send the US dollar much higher, perhaps reaching towards the 16 ZAR level . Keep in mind that the 200 day EMA sits just below at the 15.1443 level and rising. This could offer a significant amount of support as well, so at this point in time it is very likely that we would see a lot of interest.

You should keep an eye on the US dollar in general, and of course what is going on with the 10 year yield. That seems to be one of the most important things to pay attention to these days, as the Federal Reserve is suddenly back into play. If that is going to be the case, then raising interest rates should help the US dollar over the longer term. Whether or not that actually plays out as a completely different story, but we will have to see how that plays out in the next couple of days to get a decision against the South African Rand. If we break down below the 200 day EMA, then it is likely that we could go looking towards the 15 Rand level. A breakdown below that level of course would send the US dollar plunging .


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