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
EUR/USD
Bearish
Oil - US Crude
Bullish
Wall Street
Bearish
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
Gold
Bearish
GBP/USD
Bearish
USD/JPY
Bullish
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
Real Time News
  • There’s a strong correlation between interest rates and forex trading. Forex is ruled by many variables, but the interest rate of the currency is the fundamental factor that prevails above them all. Learn how interest rates impact currency markets here: https://t.co/J0EPMD2Cfi https://t.co/ZDuee58Abe
  • Many people are attracted to forex trading due to the amount of leverage that brokers provide. Leverage allows traders to gain more exposure in financial markets than what they are required to pay for. Learn about FX leverage here: https://t.co/BdgFmkRxVw https://t.co/niJL2W2yXV
  • GDP (Gross Domestic Product) economic data is deemed highly significant in the forex market. GDP figures are used as an indicator by fundamentalists to gauge the overall health and potential growth of a country. Learn use GDP data to your advantage here: https://t.co/Yl9vM7kO6a https://t.co/0rNbbrd58e
  • Traders utilize varying time frames to speculate in the forex market. The two most common are long- and short-term-time frames which transmits through to trend and trigger charts. Learn more about time-frame analysis here: https://t.co/9S5tXIs3SX https://t.co/zPzJAxBJxt
  • Emotions are often a key driving force behind FOMO. If left unchecked, they can lead traders to neglect trading plans and exceed comfortable levels of risk. Read on and get your emotions in check here: https://t.co/eILWbFgHRE https://t.co/uf6KEYTes5
  • There are three major forex trading sessions which comprise the 24-hour market: the London session, the US session and the Asian session. Learn about the characteristics of each session here: https://t.co/reRmDe1Ksp https://t.co/gRjdVfbg66
  • Implementing a trading checklist is a vital part of the trading process because it helps traders to stay disciplined, stick to the trading plan, and builds confidence. Learn how to stick to the plan, stay disciplined, and use a checklist here: https://t.co/SQUCCYRCIk https://t.co/mLLGqYUygY
  • Use this technical analysis pattern recognition skills test to sharpen your knowledge: https://t.co/Qgz89PTxnu https://t.co/HUYJzEkYiT
  • #Gold prices put in a major breakout last month and, so far, buyers have held the line. But a really big Fed meeting is on the calendar for this week. Can Gold bulls hold? Get your market update from @JStanleyFX here: https://t.co/NGRTSfceOW https://t.co/QkSUORIQE2
  • Struggling to define key levels? Floor-Trader Pivots assist traders in identifying areas in a chart where price is likely to approach and can be used to set appropriate targets, while effectively managing risk. Learn how to use this indicator here: https://t.co/Ye4m1FMKUW https://t.co/PHK2sqB1jV
USD/ZAR Forecast: South African Rand Watchful Ahead of U.S. Inflation

USD/ZAR Forecast: South African Rand Watchful Ahead of U.S. Inflation

Warren Venketas, Markets Writer

USD/ZAR ANALYSIS

  • ZAR pounces on favorable global factors
  • Local manufacturing production (MAR) at 3.4%
  • Upcoming U.S. inflation data
  • USD/ZAR holding steady around 14.0000
Advertisement

Visit the DailyFX Educational Center to discover why news events are Key to Forex Fundamental Analysis

The South African Rand has shown its “safe-haven” appeal amongst its Emerging Market (EM) currency peers in 2021 against the greenback. The ZAR has been the best performing EM currency against the U.S. Dollar this year (see chart below) primarily due to exceptional negative ongoing circumstances throughout these peer nations.

global fx rates vs dollar

Source: Reuters

With peer EM countries such as India and Brazil experiencing a severe wave of COVID-19 cases and Turkey and Russia coming with its own geopolitical risks, South Africa and its currency has taken advantage of a bad situation. Although South Africa comes with its own local economic challenges, on a relative basis (currently) South Africa is the optimal choice.

Another potential positive for South Africa is the delayed credit rating by Moody’s which could mean that the rating agency may need more time to analyze the South African financial landscape. Regardless, there was a low probability of a ratings downgrade but with countries crumbling to the effects of COVID-19 around the world, South Africa will need to handle the situation with utmost consideration to exploit financial conditions and potentially come out on the other side with a ratings upgrade.

Manufacturing production data for March 2021 came in today at 3.4%, the highest since August 2020. No initial reaction on USD/ZAR but this could improve as the market digests the information.

South Africa Manufacturing Production (March 2021)

south africa manufacturing production data

Chart prepared by Warren Venketas, Refinitiv

ALL EYES ON U.S. INFLATION DATA TOMORROW

USD./ZAR economic calendar

Source: DailyFX Economic Calendar

U.S. inflation data is flooding financial market headlines this week as analysts and experts contemplate the situation in the U.S. and whether any intervention is needed to curb the possibility of an overheating economy. This would ultimately erode the value of the Dollar and favor further ZAR strength as South African inflation remains relatively subdued. Any significant deviation from expectations (3.6%) may result in large price swings on the USD/ZAR pair therefore, ensuring sound risk management is essential pre and post announcement.

USD/ZAR TECHNICAL ANALYSIS

USD/ZAR DailyChart:

USD/ZAR daily chart

Chart prepared by Warren Venketas, IG

Yesterday,USD/ZAR pushed below the psychological 14.0000 support level and almost touched the January 2020 low at 13.9328. Since then, the U.S. Dollar has clawed back some lost gains as evident from the lower long wick on yesterdays daily candle. The theme seems to be similar today with upbeat manufacturing data and fears around U.S. inflation testing the 13.9328 support level once more.

Downward momentum remains strong despite consolidation in April as bulls attempted to maintain prices above 14.5000. This being said, the Relative Strength Index (RSI) shows bullish divergence (blue) which means the recent lower prices do not correspond with a lower reading on the RSI. This is suggestive of bullish divergence which could lead to a reversal to the upside.

Price action has been accelerating to the downside on the back of the aforementioned fundamental factors which has pushed the USD/ZAR pair toward historical key levels. A breach of initial support at 13.9328 could bring into consideration the July 2019 low at 13.8119.

Alternatively, USD/ZAR bulls will look for price rejection below key support levels and look for an upside target of 14.1536.

--- 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