South African rand price forecast: wait and see approach for USD/ZAR ahead of NFP
The ZAR remains stable while awaiting Non-Farm-Payroll stimulus
USD/ZAR FUNDAMENTAL BACKDROP
The South African rand held up against the greenback after global markets feared U.S. House Speaker Nancy Pelosi’s visit to Taiwan would spark a grander response from China. Although military drills and Chinese exports to Taiwan came under threat, the expected magnitude was greater than actuality. Coinciding with this geopolitical event, Fed speakers turned surprisingly hawkish stating that tackling inflation remains at the forefront of their agenda. This was followed by a muted reaction by markets who left rate hike pricing relatively unchanged.
Today the rand is trading marginally lower against the U.S. dollar after yesterdays strong PMI data from both South Africa and the U.S.. What could be supporting the ZAR could be the fact that China’s services PMI data beat expectations which could garner support for currencies from commodity exporting countries with close ties to China simply based on an upbeat print.
On the commodities front, iron ore is in the red today but the rest of the South African linked commodities are trading largely higher. The mix of fundamental factors are reflected in USD/ZAR price action as we await the focal economic data issue for the week in the form of Non-Farm Payrolls (NFP) – see economic calendar below.
USD/ZAR ECONOMIC CALENDAR
TECHNICAL ANALYSIS
USD/ZAR DAILY CHART
Technically, there’s not much going on echoing the lack of fundamental catalysts today so I do not expect much change throughout the day. The Relative Strength Index (RSI)supports this notion with a read roughly around the midpoint 50 area which favors neither bullish nor bearish momentum.
Resistance levels:
- 17.0000
Support levels:
- 20-day EMA (purple)
- 50-day EMA (blue)
- 16.3547 (38.2% Fibonacci)
Contact and follow Warren on Twitter: @WVenketas
This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only
