USD/ZAR Analysis Today 02/06: Lack Of Clarity (Chart)

(MENAFN- Daily Forex) The USD/ZAR has moved slightly lower in this morning as choppiness has proven to create a rather bumpy near-term for the currency pair as financial institutions test equilibrium.

The USD/ZAR is near the 17.93900 ratio as of this writing with a wide spread being seen and quick fluctuations early this morning. Friday's trading in the currency pair saw a short test of highs near the 18.07600 vicinity but before going into the weekend a price around 17.97000 developed. Since the 15th of May the USD/ZAR has tested a rather tight range which has seen support emerge around 17.75000 and resistance prove durable near 18.08000 with outliers.

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While USD weakness in Forex has been on display, price action has not been a one way avenue. Day traders globally are running into choppiness, this as financial institutions seem to be comfortable testing known price ranges. Mid-term outlook for the U.S Federal Reserve is unclear and this is causing headaches in Forex including the USD/ZAR of Clarity and Rather Bumpy Price Range

Because there seems to be a debate within Washington D.C regarding U.S interest rates, financial institutions are behaving in a cautious manner. Evidence of this can be found in the USD/ZAR which seemingly has moved sideways the past couple of weeks. Yes, there have been occasional tests of lows and sudden spikes higher, but a strong dose of impetus from the U.S has been lacking.

U.S inflation numbers on Friday met expectations. U.S jobs numbers will be published this Friday. What large traders want to know is whether or not the U.S Fed is going to start cutting interest rates. The USD/ZAR tested lows around 17.75200 on Thursday and then reversed quickly higher.

Eyes Turning Toward Fed as Lower Targets are Sought

Financial institutions which are leaning into a bearish USD/ZAR still want more reasons to be selling the USD/ZAR in a stronger fashion. Until clarity is delivered day traders may have to contend with technical perceptions which remain open to sudden shifts of perception.

Forex has been abundantly volatile the past handful of months, but the USD/ZAR has returned to the lower realms of its value which were traversed in the middle of December.
Some larger traders may be targeting lower prices which were seen in November, but for that to happen it appears the U.S Fed will have to provide justification through hints of an interest rate cut.
Until the Fed provides ammunition for Forex traders, durable support and resistance levels short-term in the USD/ZAR may find technical bounces continuing/ZAR Short Term Outlook:

• Current Resistance: 17.97500
• Current Support: 17.92600
• High Target: 18.03500
• Low Target: 17.88500

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