BRICS currencies movement for the week – 27 March 2020
Hate to admit it, but this graph looks horrible. Last time with seen similar movements was with Nenegate at the end of 2015 and before that, it was during the Great Recession of 2009. South Africa has now officially been downgraded to Junk by Moody’s and will this coming week be a trialling time for the Rand.
#BRICS currency/USD movements for this week:
Brazil -0.7%
Russia +1.5%
India -0.1%
China 0.0%
South Africa -0.1%
Euro/USD +4.2%
Technically, the Rand (ZAR) finds itself at a pivotal point in history, as it did not only reach its weakest level ever but could very much (technically) test the R20/USD levels should the current R17.75 not hold. I believe that most of the junk status is already priced into the ZAR and that we could follow a similar route the Brazilian Real experienced after their downgrade to junk in September 2015. With the Coronavirus creating havoc lately, I must be honest that I’m not entirely sure that we will follow the exact same pattern. Best would therefore be to play it safe and 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 R16.25, 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 it’s 14-day RSI.
#BRICS currency/USD movements for this week:
Brazil -0.7%
Russia +1.5%
India -0.1%
China 0.0%
South Africa -0.1%
Euro/USD +4.2%
Technically, the Rand (ZAR) finds itself at a pivotal point in history, as it did not only reach its weakest level ever but could very much (technically) test the R20/USD levels should the current R17.75 not hold. I believe that most of the junk status is already priced into the ZAR and that we could follow a similar route the Brazilian Real experienced after their downgrade to junk in September 2015. With the Coronavirus creating havoc lately, I must be honest that I’m not entirely sure that we will follow the exact same pattern. Best would therefore be to play it safe and 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 R16.25, 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 it’s 14-day RSI.