ZARMXN Long

Fundamentals
This will be a pure fundamentals play.

I've entered a (long) long, small leverage (x5), at 1.1242 , target: 1.2 , stop-loss: 1.085 , top-up: 1.1

A combination of global and domestic factors should support a secular trend higher in the cross. The bearish surprise observed in August's NFP and the MXN sensitivity to the US data, there is room continuation.

ZAR

1. Investor sentiment has improved for ZAR since the Government of National Unity was set in place.
   
2. SAGB yields are now trading at cycle lows.
   
3. The next Medium-Term Budget Policy Statement on 30 October is likely to set a fiscal anchor.
   

MXN

1. MXN is very sensitive to the USD economic data, therefore this is the main driver.
   
2. MXN sensitivity curve has been skewed to the negative US data (reactive to bad news but ignores good/neutral data)
   
3. Given the upcoming US election, MXN can find more bearish room if the election starts to show a more promising red wave.
   

Trade levels were calculated based on the montly timeframe: