#BRICS currencies movement for the week – 25 October 2019
Another solid week’s performance coming from the South African Rand and although I would like to think that it was all because of the strong inflation (CPI) beat this week (4.1% vs 4.3% in August) or even Eskom’s R59bn bailout announcement, the fact of the matter is, the general trend for Emerging Markets, was positive this week.
#BRICS currency/USD movements for this week:
Brazil +2.7%
Russia -0.1%
India +0.4%
China +0.2%
South Africa +1.1%
Euro/USD -0.8%
Technically, the Rand seems to still have strong momentum behind it and calling a turn (weaker) in the first part of this coming week, would be dangerous. It seems like it would like to test the R14.50 levels, with strong support (resistance if your long ZARUSD) at the 200-day Moving Average at R14.44 thereafter. At those levels, the USDZAR could possibly move into EXTREME oversold according to it’s 14-day RSI and could take a bit of breather. With the stronger than expected CPI figures, I don’t however foresee the ZAR losing too much ground, as the probability of an interest rate cut in November, increased substantially this week. I would therefore caution all traders to be very careful about a possible beartrap.
Should we however see a strong break and close below the 200-day moving average, could see the ZAR test the R14.20 levels, with a break below this level, targeting the primary support at R13.85 again.
My call for this coming week – we could possibly move a bit stronger earlier this coming week (trend is our friend), but recon we should end sideways.
#BRICS currency/USD movements for this week:
Brazil +2.7%
Russia -0.1%
India +0.4%
China +0.2%
South Africa +1.1%
Euro/USD -0.8%
Technically, the Rand seems to still have strong momentum behind it and calling a turn (weaker) in the first part of this coming week, would be dangerous. It seems like it would like to test the R14.50 levels, with strong support (resistance if your long ZARUSD) at the 200-day Moving Average at R14.44 thereafter. At those levels, the USDZAR could possibly move into EXTREME oversold according to it’s 14-day RSI and could take a bit of breather. With the stronger than expected CPI figures, I don’t however foresee the ZAR losing too much ground, as the probability of an interest rate cut in November, increased substantially this week. I would therefore caution all traders to be very careful about a possible beartrap.
Should we however see a strong break and close below the 200-day moving average, could see the ZAR test the R14.20 levels, with a break below this level, targeting the primary support at R13.85 again.
My call for this coming week – we could possibly move a bit stronger earlier this coming week (trend is our friend), but recon we should end sideways.