The rand has slowly started to lose value across all major currency
crosses. The dollar sell-off has given the rand a shred of life but that
should be short-lived. The economy has been ham stringed by the pandemic
with government efforts to support the poor and ailing economy proving
fruitless. 2020 saw South Africa being downgraded to "junk status" by
Moodys due to the widening budget deficit and several economic factors.

Eskom, Transnet, and South African Airways are some of the major
contributors to the deficit. Rampant corruption at State-Owned
Enterprises (SOE) requires the government to bail out these companies at
the taxpayers' expense. The lockdown spending reduced by 40% y/y
meaning South African Revenue Service (SARS) will collect less tax
limiting government spending.

The chart below shows USD/ZAR in a corrective channel higher we would
need to break 17.66666 to have some bullish bias on this pair. A bearish
set up will come in play with a break of our channel at 16.8942
targeting 15.00000.

The bigger picture on the rand is more weakness in terms of technicals
and fundamentals but we are still a long way from 22 with plenty of room
for more sideways price action.

Res: 17.50000; 18.00000; 18.09000
Sup: 16.50000; 16.32670; 16.00000

 

None of the material published constitutes a trading recommendation of any particular security, portfolio of securities or investment strategy. This should not be taken as personal advice concerning nature, potential, value or suitability of any particular security, portfolio of securities, investment strategy or other matter. Past performance does not guarantee future results.

Recommended Content


Recommended Content

Editors’ Picks

AUD/USD: A tough barrier remains around 0.6800

AUD/USD: A tough barrier remains around 0.6800

AUD/USD failed to maintain the earlier surpass of the 0.6800 barrier, eventually succumbing to the late rebound in the Greenback following the Fed’s decision to lower its interest rates by50 bps.

AUD/USD News
EUR/USD still targets the 2024 peaks around 1.1200

EUR/USD still targets the 2024 peaks around 1.1200

EUR/USD added to Tuesday’s losses after the post-FOMC rebound in the US Dollar prompted the pair to give away earlier gains to three-week highs in the 1.1185-1.1190 band.

EUR/USD News
Gold surrenders gains and drops to weekly lows near $2,550

Gold surrenders gains and drops to weekly lows near $2,550

Gold prices reverses the initial uptick to record highs around the $$2,600 per ounce troy, coming under renewed downside pressure and revisiting the $2,550 zone amidst the late recovery in the US Dollar.

Gold News
Australian Unemployment Rate expected to hold steady at 4.2% in August

Australian Unemployment Rate expected to hold steady at 4.2% in August

The Australian Bureau of Statistics will release the monthly employment report at 1:30 GMT on Thursday. The country is expected to have added 25K new positions in August, while the Unemployment Rate is foreseen to remain steady at 4.2%.

Read more
Ethereum could rally to $2,817 following Fed's 50 bps rate cut

Ethereum could rally to $2,817 following Fed's 50 bps rate cut

Ethereum (ETH) is trading above $2,330 on Wednesday as the market is recovering following the Federal Reserve's (Fed) decision to cut interest rates by 50 basis points. Meanwhile, Ethereum exchange-traded funds (ETF) recorded $15.1 million in outflows.

Read more
Moneta Markets review 2024: All you need to know

Moneta Markets review 2024: All you need to know

VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.

Read More

Majors

Cryptocurrencies

Signatures