BRICS currencies movement for the week – 3 April 2020
The Rand (USDZAR) is still very much on course to go and test that R20/USD level. It breached the R19 level this week for the first time ever, after Fitch Rating Agency downgraded South Africa to BB with a negative outlook. This saw the ZAR being the worst performing BRICS currency this week, by a country mile!
BRICS currency/USD movements for this week:
Brazil -4.7%
Russia +3.1%
India -1.0%
China +0.1%
South Africa -7.5%
Euro/USD +4.2%
Technically, the Rand (ZAR) broke the very dangerous R17.75 level this week, with not a lot standing between current levels and R20/USD anymore. It therefore seems highly likely that the ZAR could be testing the R20 levels soon. Do you call an overreaction currently? Best advice is still to play it safe - when in doubt…do nothing at all.
I personally would like to see that Rand back below the R15.50/USD levels, before I would consider any bullish position on the currency. Should we see an unlikely improvement from current levels, could see the ZAR find support (resistance if you’re long ZAR ) at the 8-day Moving Average ( EMA ) at R16.86, with a break and close below this level, making the targeted R15.50 my next major support level .
The ZAR find itself in EXTREME (capital letters for sure) OVERSOLD levels according to its 14-week RSI. This is the highest 14-week RSI levels since the big crash of 2008. Previous time when the 14-week RSI traded higher than 85 (in 2008), we subsequently saw a massive recovery in the ZAR as well, so expect…the unexpected!
BRICS currency/USD movements for this week:
Brazil -4.7%
Russia +3.1%
India -1.0%
China +0.1%
South Africa -7.5%
Euro/USD +4.2%
Technically, the Rand (ZAR) broke the very dangerous R17.75 level this week, with not a lot standing between current levels and R20/USD anymore. It therefore seems highly likely that the ZAR could be testing the R20 levels soon. Do you call an overreaction currently? Best advice is still to play it safe - when in doubt…do nothing at all.
I personally would like to see that Rand back below the R15.50/USD levels, before I would consider any bullish position on the currency. Should we see an unlikely improvement from current levels, could see the ZAR find support (resistance if you’re long ZAR ) at the 8-day Moving Average ( EMA ) at R16.86, with a break and close below this level, making the targeted R15.50 my next major support level .
The ZAR find itself in EXTREME (capital letters for sure) OVERSOLD levels according to its 14-week RSI. This is the highest 14-week RSI levels since the big crash of 2008. Previous time when the 14-week RSI traded higher than 85 (in 2008), we subsequently saw a massive recovery in the ZAR as well, so expect…the unexpected!