Our beloved rand seems to be on the ropes again after a stronger than expected US CPI print. The stronger than expected US CPI is cooling last year’s aggressive rate cut expectations which is dollar positive and drives risk-off sentiment, which is rand negative. Zooming out, the USD/ZAR pair has been in a wedge pattern since the rand made its 2Q2023 recovery...
Expecting a pullback to re-test the 50-day MA at $4,820 which coincides with the previous ATH. Strong divergence on the daily RSI serves as technical evidence for the move lower.
The pair is currently testing the 61.8% Fibo level at 18.97 and we have the psychological resistance rate sitting at 19.00. A break above this resistance range will see the rand slide to the top end of the current blue downward trend line which coincides with the red resistance range between 19.15 and 19.30. A failed break above 19.00 will allow the rand to pull...
The rand folded on Friday after the broad-based rise in the dollar. The rand managed to pull the pair to a low of 18.53 but this support rate held its ground. The pair still remains in the wedge pattern between the two blue trend lines and technically the higher low is not positive for the rand. I’m expecting a re-test of the 61.8% Fibo rate of 18.97 this week and...
US 10-year yield spiked on Friday which strengthened the 61.8% Fibo retracement rate of 3.931%. The main resistance rates now sit at 4.057% and 4.115%, the 50- and 200-day MA’s. Given the lower high made last week I suspect the next move will be higher towards the 38.2% Fibo rate of 4.347% so keep your eyes on this week’s US 10-year bond auction.
The DXY spiked aggressively on Friday after the stronger than expected US non-farm payroll print which allowed the index to break above the 200-day MA resistance rate of 103.55. The 220-day MA will now switch to a support level and a move higher towards the red trend line and the 61.8% Fibo retracement level of 104.79 looks like the next move before the RSI...
High event risk today with the SARB rate decision (they'll hold rates at 8.25%) and US GDP results. The rand will take its que from the dollar but technically a move lower towards the 200-day and 50-day MA looks likely, perhaps even deeper towards 61.8% Fibo at 18.53.
The index has put on a resounding 18% gain since the end of October 2023 after central banks started singing the tunes for rates cuts in 2024. Technically the index does looks a bit over extended at the moment given the divergence of the RSI indicator and I’m expecting a re-test of the 50-day MA soon which currently sits at $4,638.
At the moment, if crude holds above the 50-day MA level of $78.50, we could soon see a big move higher towards the 38.2% Fibo level of $93.37. The 200-day MA and 23.6% Fibo levels will however offer resistance to this move.
The DXY is currently dancing with the 200-day MA resistance rate of 103.46 after its strong start to the year. The dollar index is however nearing the overbought zone on the RSI but it still has room to move higher depending on the strength of the 200-day MA resistance. It will be a very interesting week given the interest rate decisions from the European Central...
The pair broke above the 200-day MA last week which saw it briefly touch levels above 19.00. A failed break above the red resistance range between 19.15 and 19.30 will be rand positive which could allow the rand to pull the pair back below 18.50. Zooming out you will notice that the pair is working into a wedge, illustrated by the blue trend lines and in which...
The rand has now given back almost half of its October gains following the ill received CPI figures and SARB interest rate decision. The rand slide roughly 2.5% last week which saw the USD/ZAR pair touch a high of 18.96. Luckily the rand managed to keep the pair below the critical 50-day MA rate of 18.82, but a break above this rate could see the rand slide...
The OPEC+ meeting that was scheduled to take place this weekend was postponed after disagreements from some of the African nations regarding the cartels production quotas. OPEC’s African members Angola and Nigeria have reportedly asked to have a higher production ceiling next year, after taking a cut in their quotas at the June 2023 meeting of OPEC+ as they had...
The weaker than expected US CPI results sparked a prompt risk-on rally which sent the dollar and US bond yields tumbling. The rand caught a strong bid off the back of this boosted risk-on sentiment which allowed the rand to pull the pair all the way onto the blue support line at 18.13. The critical rate to keep an eye out for now is the black 61.8% Fibo...
The rand has been volatile recently due to the swings in the global interest rate expectations. The SARB will most likely act in lock step with the Fed this week which will see the SARB keep the SA repo rate at 8.25%. The rand will be at the mercy of global investor sentiment regardless of how hawkish the SARB will be, but a hawkish tone is expected to support the...
The greenback’s recovery is allowing it to dance with the 50-day MA at 105.84. A failed break above this rate will see the DXY slide into the support range around 104.73. It’s difficult to gauge investor risk appetite at the moment but I personally predict the current dollar weakness to be a bullish pullback for the greenback which will send the DXY to 107.11.
The price of Brent crude has now given back all of the gains since the start of the conflict in the Middle East. The 200-day MA price of $82 is the critical price level to watch. A failed break below will be an early sign of another 5-wave impulse high toward $100 pb.
The DXY is currently testing the 50-day MA which has switched from a support to a resistance, sitting around 105.766. A break back above the 50-day MA will be a very bullish sign. In terms of support, a break below the support range between 104.400 and 104.725. Fundamentals for the dollar for the remainder of the 4Q2023: There were no surprises with the...