USD/ZAR Forecast Today - 19/12: USD Rises Vs MXN (Chart)

(MENAFN- Daily Forex)

• The US Dollar has rallied significantly during the trading session on Wednesday after the FOMC meeting, as we have seen data suggesting that the Federal Reserve will have to remain somewhat tight going forward, which could cause some issues in the currency markets.
• After all, if the interest rate situation in America remains somewhat elevated, you have a scenario where traders will look at this through the prism of currency strength being attached to the interest rates, and that means that the US dollar might stay somewhat strong.

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The biggest problem with the South African Rand is that it is very difficult to trade at times, because it is an emerging market, but it is also a commodity-based economy, which has its own issues. Because of this, the volatility can be quite drastic, but it does appear that the US dollar is starting to show its strength in this market as well, as we have seen against multiple other major currency such as the Canadian dollar, the Australian dollar, the Euro, and so on.

If the market were to break above the 18.40 ZAR level, it could send the market much higher, perhaps sending it all the way to the 19 ZAR level given enough time. Short-term pullbacks at this point in time will more likely than not see quite a bit of support near the 18 ZAR level, which of course is a large, round, psychologically significant figure, and an area that has been important more than once. Ultimately, if we were to break down below there then you have to start looking at the 50 Day EMA below as a potential support level as well.

EURUSD Chart by TradingView

Keep in mind that the market is going to start to suffer at the hands of illiquid conditions, as traders will be focusing more on the holidays than they are trading currencies. However, that also opens the door to much more violent moves than usual. All things being equal, I prefer the US dollar.

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