Fxequity

Festive Lull Fixes South African Rand Round 15.55


RAND ANALYSIS

  • DXY tracks historic downtrend over Christmas.
  • South African COVID-19 new instances decline.
  • Commodities assist bolster rand.
  • Lengthy-term channel sucks in USD/ZAR as soon as extra.

ZAR FUNDAMENTAL BACKDROP

The vacation interval typically reveals low volatility throughout monetary asset lessons with this 12 months being no exception (to date). The South African rand has been in a position to claw again marginal losses in opposition to the dollar after reaching yearly highs in late November.

Regardless of the Fed’s tightening strategy, the dollar has turned decrease which is typical over this era. The rationale behind the greenback depreciation as measured by the DXY, is extensively believed to be the bidding of U.S. corporations shifting funds offshore for tax causes.

The current spike in South African COVID-19 instances (Omicron variant) earlier this 12 months has been ticking decrease whereas different developed nations together with the U.S. stay elevated, favoring ZAR power. Nevertheless, uncertainty across the new variant in addition to the Fed’s hawkish tilt may possible see an extension of this 12 months’s rand weak spot in early 2022.

SOUTH AFRICA COVID-19 NEW CASES:

South Africa new COVID-19 cases

Supply: Refinitiv

Greater South African linked commodities costs together with spot gold, platinum and iron ore have contributed to the current rand worth appreciation.

UPCOMING ECONOMIC DATA

Later right now, each South African and the U.S. have medium influence occasions which ought to have minimal influence on the forex pair. Each metrics have proven comparable downtrends since mid-2021 and should proceed with right now’s information releases.

USD/ZAR economic calendar

Supply: DailyFX economic calendar

TECHNICAL ANALYSIS

USD/ZAR DAILY CHART

USD/ZAR daily chart

Chart ready by Warren Venketas, IG

Latest candlestick prints mirror the low buying and selling quantity and may proceed as we go into the brand new 12 months. I don’t foresee a lot in the best way of worth volatility this week ought to market situations stay fixed. Price action exhibits the pair now buying and selling beneath channel resistance after the Omicron impressed breakout in November. Rand power nonetheless has room to run however warning must be exercised across the 50% Fibonacci stage at 15.4289 which can present a springboard for bulls.

Resistance ranges:

  • 16.3547 – 38.2% Fibonacci stage
  • 16.0000
  • Channel resistance (black)

Help ranges:

  • 15.4289 – 50% Fibonacci stage
  • 100-day EMA (yellow)

Contact and comply with Warren on Twitter: @WVenketas





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