RAND TALKING POINTS & ANALYSIS
- MTBPS, manufacturing PMI and vehicle sales data paint a poor picture of the local economy.
- US jobs data in focus later today.
- USD/ZAR finds resistance at 18.50 and 200-day MA.
USD/ZAR FUNDAMENTAL BACKDROP
Macro-economic fundamentals underpin almost all markets in the global economy via growth, inflation and employment – Get you FREE guide now!
Foundational Trading Knowledge
Recommended by Warren Venketas
The South African rand rallied yesterday and this morning against the US dollar after the Federal Reserve decided to keep interest rates on hold (expected). Markets viewed the pause in a dovish light despite Fed Chair Jerome Powell eluding to strong economic data – GDP, high inflation and a strong labor market.
ZAR strength followed amongst weaker South African and Chinese manufacturing PMI’s showing the influence of the US economy on the local currency. Furthermore, total vehicle sales in South Africa fell reaching two month lows.
Yesterday, the Medium-Term Budget Policy Statement (MTBPS) highlighted some of the country’s headwinds including weak economic growth, increasing debt levels and ongoing blackouts (loadshedding). The impact on the rand was minimal but will keep traders wary of the vulnerable economic backdrop within South Africa.
Today’s economic calendar (see below) is fairly light and will be focused on additional US jobs data. Volatility should pick up from tomorrow’s slew of US centric high impact data including the Non-Farm Payroll (NFP) report and ISM services data – US is primarily services driven.
USD/ZAR ECONOMIC CALENDAR (GMT +02:00)
Source: DailyFX Economic Calendar
Want to stay updated with the most relevant trading information? Sign up for our bi-weekly newsletter and keep abreast of the latest market moving events!
Trade Smarter – Sign up for the DailyFX Newsletter
Receive timely and compelling market commentary from the DailyFX team
Subscribe to Newsletter
USD/ZAR DAILY CHART
Chart prepared by Warren Venketas, TradingView
As mentioned in my prior analysis, a break below the zone in and around the 18.7759 level would open up the 200-day moving average (blue) and 18.5000 psychological handle respectively. This key area of support could slowdown ZAR bulls as the Relative Strength Index (RSI) approaches oversold territory.
- 50-day MA
- 18.5000/200-day MA
Contact and followWarrenon Twitter:@WVenketas