USD/ZAR pullback in play
|The rand has suffered, the past two weeks losing around 8% of its value against the dollar. The change in sentiment comes off the back of good Non-Farm Payroll numbers which beat estimates. Showing that the American economy added more jobs than forecast.
On the technical side, we had been in a correction since the 25 June 2020 and a breakout was only a matter of time. The correction pulled back almost 100% of the initial bullish impulse which started on 10 June 2020. The move lower was slow and choppy everything you want to see from a correction after a strong impulse.
The bullish stance I have had on the rand may have caught many off-guard as we took longer than expected to start pushing higher again. The main reason behind the rand strength was simply dollar weakness.
The chart below shows a bullish count however the move higher will never go in a straight line. The current count has us in wave (iv) of a minor degree and expecting strength from the rand down to the 38.2 Fib level before we continue higher. Invalidation level of our bullish count is
16.80991.
Key Data to watch for when trading the rand this week: Wednesday 12 August 2020 Retail Sales month over month and year over year. Core Inflation rate year over year for July.
Res: 17.78521; 18.00000; 18.25946
Sup: 17.24593; 17.07218; 16.90171
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