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.



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

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View More
South African Rand Outlook: USD/ZAR Timid Following Ratings Warning

South African Rand Outlook: USD/ZAR Timid Following Ratings Warning

Warren Venketas, Analyst


  • ZAR gains interrupted by ratings warning
  • Manufacturing PMI data in focus later today
  • Potential for rectangle breakout on weekly


The Rand opened up stronger this week after optimism around the U.S. stimulus package prompted the repetitive and familiar shift to ‘risk-on’. Coupled with lesser restrictions on local lockdown measures, and a relaxed U.S. bond market aided the positive start for the ZAR.

President Cyril Ramaphosa addressed the nation over the weekend highlighting relaxed COVID-19 lockdown measures which should allow for increased stimuli regarding economic growth.

Emerging Market (EM) currencies across the globe have largely clawed back some of the lost gains witnessed last week but the South African Rand soon gave in to ratings agencies counsel.

This being said, South Africa has revised its budget deficit figure to an improved 14% of GDP, ratings agencies remained cautious around the future. They warned that rising government debt will likely endure with many other contributing factors garnering downside risk (SOE’s, upcoming elections etc.). With similar ‘watchful’ statements from ratings agencies, the Rand is currently 0.10% up on the day.


South African sovereign bond ratings

Chart prepared by Warren Venketas, Refinitiv


U.S. Manufacturing PMI data will be in focus later today (see economic calendar below) which is likely to provide some short-term volatility for USD crosses. Should estimates vary significantly from forecasted figures, large price fluctuations may ensue. It should be noted that both Markit and ISM forecasts are above 50 which is indicative of an expanding economy.

USD/ZAR economic calendar

Source: DailyFX economic calendar

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



USD/ZAR weekly chart

Chart prepared by Warren Venketas, IG

The weekly USD/ZAR chart above continues to trade within the 14.5030 (61.8%) and 15.4288 (50%) Fibonacci support and resistance zones respectively - Fibonacci retracement taken from 2018 low to 2020 high.

Discover the basic building blocks of Fibonacci and how it can be applied in Financial markets!

This zone restriction has created a rectangle pattern (blue) that suggests an impending breakout. Because the preceding trend is to the downside, this could lead to a bearish breakout should prices break below support (14.5030).

Trendline resistance (dashed black line) has held since April 2020 highs which allows for further upside before this key area of confluence is tested. A break above this could coincide with a topside breakout of the rectangle formation which may lead to a bullish break and trend reversal.

The Relative Strength Index (RSI) remains toward the bearish bias as it sits below the mid-point (50) however, a recent upward swing indicates a slowing in bearish momentum.

Starts in:
Live now:
Jan 05
( 18:01 GMT )
Keep up to date with price action setups!
Trading Price Action
Register for Webinar
Join Now
Webinar Has Ended


  • Rectangle pattern
  • Long-term trendline resistance
  • RSI bearish momentum slowing

--- Written by Warren Venketas for

Contact and follow Warren on Twitter: @WVenketas

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