2020-11-20 • Updated
The South African Reserve Bank (SARB) left its interest rate unchanged. That decision underpinned the rand and allowed it to close green yesterday. The enormous government support measures in combination with optimistic vaccine news encouraged investors to stream their capital to emerging markets currencies such as the rand. Nevertheless, the current cautious market sentiment has limited the ZAR’s potential to rise. The fresh virus outbreak and related lockdowns, curfews, and social distancing restrictions toned the risk-on impetus down.
Indeed, there are downbeat risks for the African rand in the short term, but many analysts forecast the steady rebound of economic activity in 2021(which is so close already). Therefore, stocks and riskier currencies such as the rand will get a boost.
If we look at the USD/ZAR chart, we’ll notice that the rand has managed to regain most of its losses already. As Danske Bank properly mentioned, “we view most, if not all, of the fall in USD/ZAR as due to global tailwinds, not domestic”. In other words, the only risk-on sentiment would be enough to underpin the rand and drive USD/ZAR even lower. Danske Bank’s forecast is 15.0000 for the coming months. "We could see more emerging market strength in coming months as the reopening continues”. In addition, many credible banks such as JPMorgan and Goldman Sachs predict a soon fall of the USD, which would be beneficial for the ZAR.
After the gradual falling, USD/ZAR formed the symmetrical triangle, so the pair may go anywhere now. If it breaks the upper trend line at yesterday’s high of 15.5700, the way to the next resistance of 15.6500 will be clear. In the opposite scenario, the move above the lower trend line of 15.3180 will drive the pair lower to November’s low of 15.2000.
Crude oil futures surged on Monday due to disruptions in Russian refining capacity caused by Ukrainian drone strikes and Moscow's decision to cut output to comply with OPEC+ targets. The West Texas Intermediate (WTI) contract for May settled at $81.95 a barrel, up $1.32, while the Brent contract for May settled at $86.57 a barrel, also up $1.32. Russia instructed...
Bearish scenario: Sales below 80.00 with TP1: 79.60... Anticipated bullish scenario: Intraday purchases above 80.70 with TP: 81.50...
Brent oil is currently on a bullish trend, facing resistance near $84 and supported by the 200-day EMA. Breaking above this level could lead to a climb towards $90. Short-term support is observed around $80, backed by the 50-day EMA. As summer approaches and travel increases, crude oil tends to benefit from seasonal patterns. Despite temporary setbacks, buying...
Jerome H. Powell, the Federal Reserve chair, stated that the central bank can afford to be patient in deciding when to cut interest rates, citing easing inflation and stable economic growth. Powell emphasized the Fed's independence from political influences, particularly relevant as the election season nears. The Fed had raised interest rates to 5.3 ...
Hello again my friends, it’s time for another episode of “What to Trade,” this time, for the month of April. As usual, I present to you some of my most anticipated trade ideas for the month of April, according to my technical analysis style. I therefore encourage you to do your due diligence, as always, and manage your risks appropriately.
Bearish scenario: Sell below 1.0820 / 1.0841... Bullish scenario: Buy above 1.0827...
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