The rand seems to be holding steadily following the past two weeks of Fed noise and Friday's non-farm payroll print. The US 10-year treasury yield spiked rapidly after the payrolls print, roughly 4.37% to 1.912 which allowed the DXY to gain some strength. The key resistance rate for continued rand weakness in my opinion remains at 15.64388 (the 38.2% Fibo retracement rate from the pair's highs in April 2020). This resistance rate also coincides satisfyingly with the 50-day MA rate of 15.65.
In terms of the Elliot wave theory the impulse wave from the dashed blue channel has been invalidated because wave four broke below the peak of wave one at 15.40. The channel is however still holding its ground which is rand negative.
In terms of commodities, the current commodity cycle is still well intact. Brent crude oil closed the week at $92.74 and looks set to go much much higher as the year progresses which is rand positive. The one commodity to watch for this pair however is platinum. The precious metal is currently holding onto prices above $1000/oz after starting the year positively but the resistance price of $1066/oz still remains intact.
Technically, there is a buy signal on the MACD indicator and the RSI is trending higher which is hinting at some rand weakness for the month of Feb. A break above 15.64 will allow the pair to test December's high of 16.10. On the flip side, if the rand can hold the pair below the 50-day MA and pull the pair below 15.40 we could see a retest of 15.04.
In terms of the Elliot wave theory the impulse wave from the dashed blue channel has been invalidated because wave four broke below the peak of wave one at 15.40. The channel is however still holding its ground which is rand negative.
In terms of commodities, the current commodity cycle is still well intact. Brent crude oil closed the week at $92.74 and looks set to go much much higher as the year progresses which is rand positive. The one commodity to watch for this pair however is platinum. The precious metal is currently holding onto prices above $1000/oz after starting the year positively but the resistance price of $1066/oz still remains intact.
Technically, there is a buy signal on the MACD indicator and the RSI is trending higher which is hinting at some rand weakness for the month of Feb. A break above 15.64 will allow the pair to test December's high of 16.10. On the flip side, if the rand can hold the pair below the 50-day MA and pull the pair below 15.40 we could see a retest of 15.04.
Comment:
Interesting day of trading yesterday, The ZAR kept the pair in the current downward black channel despite the DXY putting on some noticeable gains. The pair closed the day below my previously mentioned support of 15.40 which has me expecting a channel break to the downside of the blue channel.
Comment:
The daily close below 15.40 has allowed the rand to pull the pair out of the upward blue channel. Currently testing the psychological support of 15.00. The pair is however entering the oversold zone which could add strength to this support at 15.00.
