USD/ZAR Analysis Today - 07/10: Bounce Amid Concerns (Chart)

(MENAFN- Daily Forex) The USD/ZAR has traded higher in the past handful of days as a combination of risk adverse sentiment, U.S interest rates concerns, and domestic news effect financial institutions.

• The USD/ZAR currency pair is near the 17.45980 ratio as of this writing which is lower than the high the currency pair saw this past Friday when the 17.60000 was challenged in the wake of the U.S jobs numbers publication.
• The USD/ZAR did traverse lows early last week near the 17.18400 mark briefly.
• Nervous trading has been seen in all of Forex the past handful of days as sentiment has become fragile and the USD has grown stronger across the board.

The USD/ZAR has correlated to the broad Forex market well. However, news reports from South Africa last week regarding the increased usage of diesel fuel by ESKOM, the South African energy provider, which is government owned, has likely caused some worries in domestic financial institutions. Loadshedding which had been problematic in South Africa over the past decade has largely been negated, but reports indicate that ESKOM has had to burn more fuel to meet energy demands the past couple of months. This means higher costs for electrical usage in South Africa may be passed onto some consumers and that inflation rates over the next few years could remain higher than previous outlooks over the next few years. But importantly there has been transparency regarding the electrical issue.

Top Forex Brokers1 Get Started 74% of retail CFD accounts lose money U.S Federal Reserve Concerns and USD Centric Strength

The addition of stronger than expected U.S jobs numbers created a reaction in the broad Forex market this past Friday. The USD had gotten stronger the past week also due to risk adverse conditions increasing, the addition of worries via the U.S Fed's potential interest rate policy on November the 7th added more concerns. However, the USD/ZAR remains within the long-term lower part of its price realms.

Friday's price action to highs followed by a reversal lower was a solid sign for the USD/ZAR. Buying did not get out of hand and it appears financial institutions remain calm. The near-term in the USD/ZAR is likely to be choppy and the 17.50000 level could prove to be interesting as a barometer regarding behavioral sentiment Data from the U.S on Thursday

The U.S will issue its CPI data this coming Thursday and the results will impact Forex including the USD/ZAR. Lower U.S inflation data would certainly help sooth nervousness regarding the Fed's interest rate decision next month. Short-term traders may question what a one month outlook has to do with the USD/ZAR today and tomorrow, but retail traders need to understand financial institutions position themselves via longer timeframes compared to small speculators.

• If the USD/ZAR can remain under the 17.50000 price realm over the near-term this would be a bearish signal.
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  However, risk adverse conditions continue to linger because of geopolitical concerns, and this could provide opportunities to pursue short-term quick hitting reversals in a nervous marketplace.

USD/ZAR Short Term Outlook:

Current Resistance: 17.50100

Current Support: 17.42490

High Target: 17.53800

Low Target: 17.39900

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