USD/ZAR, USD/MXN and USD/HUF Forecast – Carry Trade Still Working for Traders

USD/ZAR Technical Analysis

The US dollar continues to suffer at the hands of the South African rand, which has just hit its highest point since 2022. So with that being said, it does look like a market that traders are simply taking advantage of the interest rate differential, and that could go down to 15.7, maybe even 15.16.

Short-term rallies continue to be selling opportunities and have been for a while. This is the epitome of a very strong and steady downtrend. You do not want to fight it. Besides, if you do, you get to pay swap at the end of every session, and that is not exactly what we like doing as FX traders.

USD/MXN Technical Analysis

The US dollar continues to drift lower against the Mexican peso. I do think this probably heads down to the 17 level and then eventually 16.6 at this rate. Keep in mind this pair tends to not only take the interest rate differential into account, as Mexico has a much higher rate, almost double what the US has, but it also takes into account Mexican exports into the United States.

As long as the US economy is doing fairly well, the Mexicans prosper. This has one of the most interesting pairs for me, at least watching the US economy and how it behaves and how the Mexican economy responds to that, as it is the world’s largest exporter to the United States. So again, I think this is a fade the rally type of scenario, and I do think we are going lower.

USD/HUF Technical Analysis

Finally, the US dollar against the Hungarian forint has broken down below the 320 level. This is a carry trade that most people, quite frankly, are ignorant of. They just do not know that there is a European currency out there that you can use for carry trading against the US dollar.

The interest rate differential is wide enough that it matters. The great thing about this setup is there is a clear target down at 309. So you are talking about 10 more handles. This is a pair that pays you to be short and you can see that the 50-day EMA has served as almost like a downtrend line. I like this one a lot and have for quite some time. I know that selling and holding in this case is not as interesting or as exciting, but it sure is profitable.

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