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USD/ZAR Breaking News: Rand Fades After Mixed South African GDP

USD/ZAR Breaking News: Rand Fades After Mixed South African GDP

Warren Venketas, Analyst

RAND ANALYSIS

  • Missed QoQ GDP hampers rand gains.
  • USD/ZAR advances off key support.
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ZAR FUNDAMENTAL BACKDROP

Stats SA have released Q2 GDP data (see calendar below) for 2021 outperforming YoY estimates. The low base last year reflects an exceptional performance but relative numbers across other nations paints a different picture.

SA Q2 GDP (YoY):

sa GDP YoY

The QoQ print missed expectations which is likely as a result of the recent civil unrest which caused many business to suspend trading or close completely. The rand opened trading marginally lower against the U.S. dollar this morning with little resulting from GDP data.

economic calendar sa gdp usd/zar

Source: DailyFX economic calendar

The dollar seems to be steering the USD/ZAR pair at this point but with a dovish slant lingering form the Federal Reserve we have seen a risk-on development across financial markets. Without any high impact U.S. or South African data scheduled this week, this may likely continue ceteris paribus. South African GDP is unlikely to prompt tightening by the South African Reserve Bank (SARB) any sooner than anticipated which could favor USD/ZAR bulls as year end approached.

GET YOUR Q3 RAND FORECAST HERE!

TECHNICAL ANALYSIS

USD/ZAR DAILY CHART

usd/zar daily chartr

Chart prepared by Warren Venketas, IG

The daily USD/ZAR chart shows the august swing low at 14.2238 holding as bulls push off this key area of confluence. Trendline resistance (black) will be in focus and a daily candle close above could prompt further upside for the rest of the week. Despite a bearish crossover unfolding via the Exponential Moving Average (EMA) – 20-day EMA crossing below 50-day EMA, bulls are winning the tig of war at this point. There could be hesitancy around trendline resistance which could see prices fall lower but the Relative Strength Index (RSI) suggests the pair is in pending oversold territory. 14.0000 is not out of the question without any dollar stimuli so caution is warranted. My long-term outlook remains is firmly bullish as the dismal local political and economic landscape endures. The U.S. looks far more positive which should spark upside in time to come.

Resistance levels:

Supportlevels:

  • 14.2238
  • 14.0000

--- 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.

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