South Africa Central Bank Governor Kganyago said monetary policy is still accommodative and inflation is well contained. These comments came after South Africa’s August PMI came in at 49.7 vs 47 expected. USD/ZAR is down 1.9% at the time of this writing at 14.8052, with a low of 14.7495, its lowest level since August 2nd. The pair held horizontal support at 14.7483.
The emerging market currency pair put in a double top during the month of August near 15.49 and broke down from consolidation today below 15.0726. The target for a double top is the height of the consolidation zone added to the breakdown, which in this case is 14.63. This area is also the 50% retracement level from the lows on July 19th to the highs on August 19th. Below that, support comes in at the 61.8% retracement level near 14.45.
The RSI is currently oversold, so the pair may bounce before heading lower. USD/ZAR resistance is now at the breakdown level at 15.0726.
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