USD/ZAR: Overcoming the 15.60 resistance is crucial for an extended rebound – SocGen
|The spotlight falls in South Africa on Thursday where the South African Reserve Bank is expected to hike the policy rate to 4.00% from 3.75%. USD/ZAR has rebound from a multi month ascending trend line near 15.07 towards 15.60. A break above here would denote further upside potential, economists at Société Générale report.
Risk of deeper downtrend towards 200-DMA at 14.85 on a break under 15.07
“We pencil in a 25bp increase by the SARB to 4.0% and hawkish guidance is likely to be maintained. The scope for a hawkish surprise is small unless rates rise 50bp, which is unlikely considering the resilience of the rand compared to others in EMEA.”
“Overcoming 15.60, the 38.2% retracement from November and the daily Kijun line resistance will be crucial to denote an extended bounce towards daily Ichimoku cloud at 15.87 and recent peak of 16.35.”
“In case the support at 15.07 gets violated, there would be a risk of deeper downtrend towards 200-DMA at 14.85.”
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