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Since December 2015’s brutal depreciation of the rand following the surprise shift in South Africa’s Finance Ministers in what’s become known as the Nenegate scandal, the rand has been on a steady path to recovery in 2016.
However, news that South Africa’s Finance Minister Pravin Gordhan might be facing a possible arrest by the “Hawks” (Directorate for Priority Crime Investigation), as well as a new forensic investigation relating to his tenure at the South Africa Revenue Service (SARS) has provided a domestic catalyst for renewed short-term weakness for the rand.
Ironically, or coincidently, the chart snapshot taken on 22 August showed a forewarning that the rand (in dollar terms) had formed a “w” shaped reversal pattern. The pattern (in the below context) suggests a short-term change in directional trend from that of strength to one of weakening.