Skip to content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
Gold
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
USD/ZAR Outlook: Doubtful South African Rand Centers on FOMC

USD/ZAR Outlook: Doubtful South African Rand Centers on FOMC

Warren Venketas, Analyst

RAND ANALYSIS

  • Rand at mercy of global risk sentiment.
  • Focus on China and U.S. next week.
Advertisement

ZAR FUNDAMENTAL BACKDROP

After a strong past week for USD/ZAR bulls, the week ahead provides many fundamental drivers that could provide forward guidance for the Emerging Market (EM) currency. Recent positive jobless claims data and flat CPI prints have left markets undecided. Unfortunately for ZAR supporters, the slight impetus gained after the CPI announcement was not enough to overcome the better than expected jobless claims. In particular, direction on Fed QE tapering will be the focal point as the FOMC meets on Wednesday (see calendar below).

GET YOUR Q3 RAND FORECAST HERE!

From a South African perspective, inflation (see calendar below) and retail sales data for July and June respectively will have rand followers engrossed. Inflation for July will be an interesting statistic as markets look to see whether or not the recent riots had any impact. These may have some influence on USD/ZAR but more emphasis should be placed on the FOMC meeting later in the day. Positions should be effectively managed using proper risk technique as volatility is expected both pre and post-announcement.

USD/ZAR ECONOMIC CALENDAR

Source: Refinitiv

With China struggling to deal with the COVID-19 delta variant as new cases rise, pressure is weighing on commodities globally. China being a key trading partner for South Africa; the demand for local exports (iron ore, platinum, gold etc.) will likely decline thus adversely affecting the rand.

Trading Forex News: The Strategy
Trading Forex News: The Strategy
Recommended by Warren Venketas
Trading Forex News: The Strategy
Get My Guide

TECHNICAL ANALYSIS

USD/ZAR DAILY CHART

USD/ZAR Chart

Chart prepared by Warren Venketas, IG

The daily chart shows a firm trendline support (black) holding up any rand strength since mid-June. Last weeks bullish run is clear with a test of the 14.9000 handle. The 20-day EMA has been key this week which is respected as short-term support - coinciding with the 14.6000 confluence zone (blue) which has been an area of both support and resistance. A close below these key levels could trigger a downward move to the 14.5000 psychological zone.

A bullish outcome from the economic data throughout the week may see a subsequent push to 14.9000 and beyond to the July swing high around 15.0000.

Resistance levels:

  • 15.0000
  • 14.9000

Support levels:

  • 14.7500
  • 20-day EMA (purple)

--- Written by Warren Venketas for DailyFX.com

Contact and follow Warren on Twitter: @WVenketas

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES