BRICS currencies movement for the week – 10 January 2020
Some might call it ONLY profit-taking on the Rand during the week. The harsh reality is over the same week the World Bank also cut its economic growth forecast for South Africa to below 1% for 2020 due to electricity supply concerns. It now expects the economy to expand by only 0.9% this year, which is not only down from 1% published in its Africa Pulse report released in October 2019, but also well below government forecasts.
#BRICS currency/USD movements for this week:
Brazil -0.7%
Russia +1.7%
India +1.1%
China +0.7%
South Africa -0.4%
Euro/USD -0.3%
Technically, the most noticeable event for the Rand, was that we saw a “Death Cross” (Golden Cross if you’re looking from a Rand or ZARUSD point of views) for the first time since February last year. Could it be as short-lived as last year’s Death Cross would be anyone’s guess? For now, this is however a positive sign for any Rand-lovers.
The Rand/USD is still trading well below both the 50-day and 200-day moving averages. We did however see the trend of the 200-day MA change direction this week (upward), which I will be monitoring closely in this coming week. A downward sloping MA, is a healthy trend, while an upward sloping MA, might signal a change in the trend (not so healthy). The 50-day MA however is still very much sloping downward.
The USDZAR moved out of EXTREME OVERSOLD (overbought Rand) according to its 14-day Relative Strength Index ( RSI ).
Should weakness persists, the ZAR could move back into the Symmetrical Triangle (at R14.45), which subsequently could see the Rand seeking resistance at R14.50 with both the 50-day (R14.55) and 200-day (R14.58) moving averages being next stop. A break and close above these levels, could most probably test the top of Symmetrical Triangle at R14.93, with R15 being an extreme and vital resistance level. Any traders should watch this level VERY closely.
My call for this coming week is to hold the line. I still maintain my longer-term (positive) stance on the Rand. It also still seems like it wants to go and test the medium-term target of R13.85, but will need some very lacking, positive news. I don’t see any positive news coming out over the shorter term and will, therefore, remain neutral for this coming week, with the most likely trading band being between R14.15 and R14.50.
#BRICS currency/USD movements for this week:
Brazil -0.7%
Russia +1.7%
India +1.1%
China +0.7%
South Africa -0.4%
Euro/USD -0.3%
Technically, the most noticeable event for the Rand, was that we saw a “Death Cross” (Golden Cross if you’re looking from a Rand or ZARUSD point of views) for the first time since February last year. Could it be as short-lived as last year’s Death Cross would be anyone’s guess? For now, this is however a positive sign for any Rand-lovers.
The Rand/USD is still trading well below both the 50-day and 200-day moving averages. We did however see the trend of the 200-day MA change direction this week (upward), which I will be monitoring closely in this coming week. A downward sloping MA, is a healthy trend, while an upward sloping MA, might signal a change in the trend (not so healthy). The 50-day MA however is still very much sloping downward.
The USDZAR moved out of EXTREME OVERSOLD (overbought Rand) according to its 14-day Relative Strength Index ( RSI ).
Should weakness persists, the ZAR could move back into the Symmetrical Triangle (at R14.45), which subsequently could see the Rand seeking resistance at R14.50 with both the 50-day (R14.55) and 200-day (R14.58) moving averages being next stop. A break and close above these levels, could most probably test the top of Symmetrical Triangle at R14.93, with R15 being an extreme and vital resistance level. Any traders should watch this level VERY closely.
My call for this coming week is to hold the line. I still maintain my longer-term (positive) stance on the Rand. It also still seems like it wants to go and test the medium-term target of R13.85, but will need some very lacking, positive news. I don’t see any positive news coming out over the shorter term and will, therefore, remain neutral for this coming week, with the most likely trading band being between R14.15 and R14.50.
Trade closed: target reached