Focusing on the technical view, the USDZAR trajectory is likely to remain influenced by the Dollar’s performance. If the 14.00 proves to be a reliable support, the next key level of interest on the USDZAR is likely to be based around 14.20.
Dollar buoyed by safe-haven flows
Market caution has sent investors rushing to the Dollar which remains the go-to currency in times of uncertainty.
The Dollar Index is rebounding towards the 96.30 level as of writing and is likely to extend gains on expectations of a rate hike in December. While the short to medium term outlook for the Greenback remains heavily bullish, the longer-term view remains open to questions. Cautious comments from Fed officials last Friday have prompted investors to re-evaluate the central bank’s hiking path beyond 2019. A scenario where trade tensions negatively impact global growth and emerging markets crumble to an appreciating Dollar could force the Fed to slow down its monetary tightening cycle.
In regards to technical perspective, the Dollar Index remains at risk of sinking lower if bulls are unable to defend the 96.00 support level.
Commodity spotlight – WTI Oil
The past two trading months have been unquestionably bearish for Oil markets due to ongoing supply and demand side concerns.
Rising global supply and worrying signs of slowing demand have been the key players behind Oil’s steep decline. Although Oil prices recently received a slight boost on speculation over OPEC cutting production by roughly 1 million to 1.4 million barrels per day in December, gains were capped by rising U.S. Shale production and fears of global growth plateauing. With global inventories back on the rise and global supply outstripping demand, the underlying fundamentals point to further downside for Oil prices.