Dollar A.S / Rand Afrika SelatanDiupdate Top side test of the Blue wedge
The rand had a tough week at the office following the budget speech which saw the USD/ZAR pair touch a 4-month high of 19.40. The pair is now testing the downward blue trend line which forms the blue wedge pattern in place since 2Q2023.
A break above this trend line would see the rand fold to 19.63 and possibly higher towards the all-time highs of 19.94. The fact that the rand failed to hold the pair below the 61.8% Fibo rate of 18.97 is technically rand negative and on top of that the 50-day MA has crossed above the 200-day MA (golden cross).
The only scope for a rand recovery is if the dollar depreciates significantly off the back of early rate cuts from the Fed or if precious metals go on a raging bull rally. Until then it seems as if the rand will remain on the ropes. The daily RSI still has room to move higher before hitting overbought zones which is not rand supportive.
A break above this trend line would see the rand fold to 19.63 and possibly higher towards the all-time highs of 19.94. The fact that the rand failed to hold the pair below the 61.8% Fibo rate of 18.97 is technically rand negative and on top of that the 50-day MA has crossed above the 200-day MA (golden cross).
The only scope for a rand recovery is if the dollar depreciates significantly off the back of early rate cuts from the Fed or if precious metals go on a raging bull rally. Until then it seems as if the rand will remain on the ropes. The daily RSI still has room to move higher before hitting overbought zones which is not rand supportive.
Catatan
Blue trend line is last line of defence for the rand. It has held all week so far and the moves after the US PCE print will determine whether is holds or foldsCatatan
SA GDP results and US non-farm payrolls are the headliners this week. I expect a wedge break off the back of these data prints. I'm leaning towards a topside break atm but a move back below 18.97 will support a downside break.
Catatan
The break below 18.97 has allowed the rand to pull the pair below the 50-day MA, currently at 18.87. Expecting support on the bottom of the blue wedge and the 200-day MA at 18.75.
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