USD/ZAR keeps the upside gap towards 15.50 as Fitch downgrades South Africa

  • USD/ZAR snaps two-day losing streak with the week-start upside gap to 15.42.
  • Fitch downgrades South Africa to BB- with a negative outlook.

Having marked a 10-pips gap-up, from 15.32 to 15.42, at the week’s start, USD/ZAR seesaws in a choppy range, currently around 15.43, during Monday’s Asian session. In doing so, the pair respects the rating downgrade from the global rating giant Fitch while parting ways from the previous two days’ declines.

In its latest update, Fitch said, “Fitch Ratings has downgraded South Africa's Long-Term Foreign-Currency Issuer Default Rating (IDR) to 'BB-' from 'BB'. The Outlook is Negative.” The rating giant cited high and rising government debt, exacerbated by the economic shock triggered by the coronavirus (COVID-19) pandemic, as the key catalysts for the latest announcement on ratings.

Even so, the USD/ZAR bulls remain capped as the US dollar fails to extend Friday’s gains amid mixed sentiment concerning the risks.

Although hopes of the covid vaccine/treatment favor the bulls, a sustained rise in the cases joins the uncertainty surrounding the US Federal Reserve’s emergency stimulus plans, due to Treasury Secretary Steve Mnuchin’s recall of $500 billion, question risks. However, S&P 500 Futures print 0.20% intraday gains while the US 10-year Treasury yields remain sluggish around 0.82% by press time.

Moving on, Wednesday’s October month’s inflation data for South Africa becomes the key indicator to watch for USD/ZAR traders while the November month’s US PMIs and risk catalysts can also direct the pair moves.

Technical analysis

Any moves inside the trading range between 15.45 and 15.21, comprising 10-day SMA and the monthly low, become less meaningful.

Additional important levels

Today last price 15.4312
Today Daily Change 0.1026
Today Daily Change % 0.67%
Today daily open 15.3286
Daily SMA20 15.783
Daily SMA50 16.271
Daily SMA100 16.6101
Daily SMA200 16.9911
Previous Daily High 15.4644
Previous Daily Low 15.2854
Previous Weekly High 15.584
Previous Weekly Low 15.2832
Previous Monthly High 16.8003
Previous Monthly Low 16.0915
Daily Fibonacci 38.2% 15.3537
Daily Fibonacci 61.8% 15.396
Daily Pivot Point S1 15.2545
Daily Pivot Point S2 15.1804
Daily Pivot Point S3 15.0755
Daily Pivot Point R1 15.4335
Daily Pivot Point R2 15.5385
Daily Pivot Point R3 15.6126



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