Since the last updated call, we can see circled blue, that the USD/ZAR reversed course and triggered our stop loss at R13.80. The decision by Moody’s to extend South Africa a lifeline and not follow ratings agency peers in dropping South Africa’s local and foreign currency debt to sub-investment grade (yet) has provided the short term catalyst for rand strength (for more info read S&P Global downgrades SA, Moody’s gives lifeline).
In our last report we:
- Viewed the reversal off support at R13.95/$, supported by the stochastic crossing its trigger line in oversold territory as a long opportunity
- Upside targets considered were located at R14.45/$ and R14.57/$ respectively as initial targets
- A close below R13.80 was used as the failure level (stop loss)
.jpg)
