BRICS currencies movement for the week – 10 July 2020
This has been the third week in a row where the Rand (ZAR) outperformed both the USD and all other BRIC currencies. Over the shorter-term period, while commodity prices (Gold, Platinum, Palladium, etc) are running, I would not be shorting the ZAR now, as this is still very good for the South African economy.
BRICS currency/USD movements for this week:
Brazil -0.1%
Russia +0.7%
India -0.7%
China +0.9%
South Africa +1.5%
Euro /USD +0.4%
Technically, the ZAR remained within the parallel channel, with the top resistance level again being seriously tested on both Tuesday and Wednesday. We again saw the 21-day Moving Average (EMA) acting as a very strong resistance level.
I will still be monitoring the R16.85/USD level in the early part of this coming week. A break and close above the parallel channel could see the ZAR seeking resistance at the 21-day EMA at R17.09, with a break and close above these levels, seeking resistance at the 5-day EMA (R17.29). Should we break above R17.30, the next target becomes R17.65.
Should we however stay below R16.85 and below the 8-day EMA at R16.95, we could see the ZAR moving closer to the strong support level (bottom of the parallel channel) at R16.50 again. A break a close below this level could see the ZAR back testing the 200-day EMA (R16.41), with a break and close below, very much putting us back at my medium-term target, R15.50.
Al three the 8-, 21- and 50-day EMA are still pointing downward, which is a good indication that the trend is still looking a lot healthier.
I will however still caution any short positions prior to a confirmation-break below R16.50 and remain Neutral for now. For those traders considering a long USDZAR (short ZAR) position, should wait for a proper break and close above R17.30. The most likely trading band this week is being between R16.40 and R17.10.
BRICS currency/USD movements for this week:
Brazil -0.1%
Russia +0.7%
India -0.7%
China +0.9%
South Africa +1.5%
Euro /USD +0.4%
Technically, the ZAR remained within the parallel channel, with the top resistance level again being seriously tested on both Tuesday and Wednesday. We again saw the 21-day Moving Average (EMA) acting as a very strong resistance level.
I will still be monitoring the R16.85/USD level in the early part of this coming week. A break and close above the parallel channel could see the ZAR seeking resistance at the 21-day EMA at R17.09, with a break and close above these levels, seeking resistance at the 5-day EMA (R17.29). Should we break above R17.30, the next target becomes R17.65.
Should we however stay below R16.85 and below the 8-day EMA at R16.95, we could see the ZAR moving closer to the strong support level (bottom of the parallel channel) at R16.50 again. A break a close below this level could see the ZAR back testing the 200-day EMA (R16.41), with a break and close below, very much putting us back at my medium-term target, R15.50.
Al three the 8-, 21- and 50-day EMA are still pointing downward, which is a good indication that the trend is still looking a lot healthier.
I will however still caution any short positions prior to a confirmation-break below R16.50 and remain Neutral for now. For those traders considering a long USDZAR (short ZAR) position, should wait for a proper break and close above R17.30. The most likely trading band this week is being between R16.40 and R17.10.