Longer-term USD/ZAR
The golden cross of the 50-day MA above the 200-day MA is a long-term buy signal and possibly the start of a fresh impulse wave higher. The daily MACD has also recently crossed to a buy signal after the pair closed above the psychological 15.00 barrier earlier this week. A daily close above the current yearly high of 15.28 could be an early sign of another leg higher towards the 15.60 and the lower 16.00's.
Fundamentally, the rand is still struggling to nurse its wounds from the July riots, the SARB is still maintaining a dovish stance (while other emerging market central banks from Russia and Brazil have started hiking) which dampens the rand's carry trade appeal and most importantly imo, precious metal prices (particularly platinum) are still trending lower which is rand negative.
In terms of the broader market sentiment, as equity markets continue to hit record highs, crude oil keeps ripping higher and the US treasury yield curve remaining suppressed, I'm hesitant to call an end to the current risk-on wave, which is however rand positive. Yes, the fed has signalled for a possible taper recently and China seems to be reigning in its debt but nothing has spooked the bond or equity markets just yet.
SA's trade surplus has supported the rand and tomorrow we'll get the latest trade balance results from SA for the month of September. It currently stands at a healthy surplus of R42.40 billion, but if we are to see a significant reduction of the trade surplus towards year-end, the rand could take quite a tumble.
Fundamentally, the rand is still struggling to nurse its wounds from the July riots, the SARB is still maintaining a dovish stance (while other emerging market central banks from Russia and Brazil have started hiking) which dampens the rand's carry trade appeal and most importantly imo, precious metal prices (particularly platinum) are still trending lower which is rand negative.
In terms of the broader market sentiment, as equity markets continue to hit record highs, crude oil keeps ripping higher and the US treasury yield curve remaining suppressed, I'm hesitant to call an end to the current risk-on wave, which is however rand positive. Yes, the fed has signalled for a possible taper recently and China seems to be reigning in its debt but nothing has spooked the bond or equity markets just yet.
SA's trade surplus has supported the rand and tomorrow we'll get the latest trade balance results from SA for the month of September. It currently stands at a healthy surplus of R42.40 billion, but if we are to see a significant reduction of the trade surplus towards year-end, the rand could take quite a tumble.
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Yesterday's US GDP print was the perfect summary of where the market currently finds itself. The QoQ GDP growth came in well below expectations at 2.0% while yet another 281 thousand Americans applied for first time unemployment benefits, and guess what the US equity markets continued to climb higher (despite many mainstream commentators calling for a stock market crash in October). The situation remains the same, the worse the economic news/results from the US, the more likely it is that the Fed will continue to pour easy money into the markets (don't get caught in the cross hairs when the Fed talk about their supposed "taper"). The DXY (dollar index) as a result also took heavy hits yesterday which could give the rand some room to breath before we close the week.
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SA trade surplus for September = R22.24 billion, down from R42.40 billion...
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The pair failed to break above the resistance range between 15.28 and 15.60. I'm going to have to invalidate the idea if the pair closes the week below 14.75
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The pair is currently drifting between 15.60 and 15.28.
The SARB will announce their latest interest rate decision later today and if the bank opts to keep rates unchanged the pair will most likely break above 15.60 and move higher towards 16.00.
The SARB will announce their latest interest rate decision later today and if the bank opts to keep rates unchanged the pair will most likely break above 15.60 and move higher towards 16.00.
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The pair climbed in the range between 16.11 and 16.38 in early morning trade. Fundamentally the rand is looking battered... A move towards 16.30 looks highly likely but thereafter we could see a minor pullback.
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