USD/ZAR – Weekly Outlook for South Africa Binary Options Brokers
The South African Rand has been under pressure against the US Dollar as most other currencies following Trump’s election for President of the US. The main question in the near future is will the strong resistance zone at 14.50 – 14.75 hold the USD from advancing higher?
The answer will depend mostly on where interest rates will move in South Africa and the US.
Judging by the strength of the US Dollar at the moment and fact that the USD bull trend has a lot more room to run it’s very unlikely that South Africa binary options traders see USDZAR below the 1.1320 strong support zone.
With this in mind the pair should be able to gradually move up, and break the 14.50 – 14.75 resistance zone higher. This will be especially easier to be done if South Africa’s high inflation rate stabilizes and starts to fall towards the target range of the South African Reserve Bank.
The SARB will announce its interest rate decision this Thursday, and while it’s expected for them to hold rates steady this time, for the future it’s possible and even likely that they will increase interest rates. The latest inflation reading showed an increase in prices more than expected in the month of October. This only puts additional pressure on the SARB to raise interest rates in the future and this will be particularly the case if the South African Rand depreciates in value.
Technicals reflect the fundamental situation. High-interest rates in South Africa and higher interest rates expected in the US have kept both the Rand and the Dollar strong, and consequently the USDZAR currency pair trades in a range for more than 3 months.
The pair has reversed from a strong resistance zone, primarily provided by the downward channel’s upper border.
Now, technically the direction is clear – down. There are no support levels to the downside until the bottom of the box range at 13.20.
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