The weekly close below 15.65 last week is rand positive heading into 2022. The next support I'm watching is 15.50. A break below 15.50 will allow the rand to pull the pair lower towards the bottom of the orange medium term channel between 15.16 and 15.30 (or the 100 day MA at 15.23)
Fundamentally however the Feds expected March rate hike will be dollar positive but I believe it may already be baked into the market.
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The rand did well to hold the pair to a daily close below the 50-day MA despite the heavy sell-off in risk assets during the session. A test of 15.50 still looks likely.
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The rand is leaving the 15.50 support in the dust following Powell's Fed statement yesterday and today's US CPI print. The pair is currently sitting just above the the major green support range. I'm not sure how much legs the rand has left but the rise in crude oil, the easing of the 10-year treasury yield curve, the drop in the DXY and the bounce in the US stock market is rand positive.
The price seems to reach the bottom as no further drop when DXY going down and PTX/XAU going high. I suppose the close price of today is very important.
donjuan201
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Just a thought; EW rules state that wave 4 may not overlap with wave 1 and if according to your analysis price action takes it past 15.39 or lower it will overlap with wave 1 and invalidate your orange count.....so maybe wave 4's support is near, double bottom at 15.50 maybe?
GustavFourie96
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@donjuan201, Thanks for your input, yeah I agree wave 4's support looks close. I don't believe the rand will be able to pull the pair lower than the green-zone (or the 100-day MA) unless precious metals break out of their downward trend.
GustavFourie96
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@donjuan201, Currently testing 15.50, keeping an eye on the potential double bottom you referred to. Hope you have a lekker day Don!
GustavFourie96
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This is my idea i did back in October, very similar to the one I just posted
yanheer
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South Africa has more than 40% unemployment rate released last week and less than half people has vaccinated. I think the reversal is coming soon.
GustavFourie96
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@yanheer, I don't believe vaccination rates have any effect on FX markets. I hear your point on the unemployment issue. Fundamentally nothing is rand positive at the moment unfortunately haha. One thing to keep an eye on is precious metal prices, particularly platinum. If precious metals start trending upwards it will be hugely beneficial for the rand. If 15.50 holds, I agree with you that the reversal is near.
GustavFourie96
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Just had a look at Plat. If 908.80/OZ holds it could allow the metal to test the upper end of the medium-term downward channel. First rate of resistance seems to be the 50-day MA for now.