Good day, hope you all had a stellar trading week. Apologies if my charts do not show up. Hopefully today will be different

Well Trump is the president elect, markets were haywire and the world is in limbo. The Rand did as most expected and tumbled its way to 3 week lows.

Most of the losses in the rand were due to the ascension of Trump. The rand lost as it went from a low of 13.16 to the dollar to a high of 14.46. Very worrying.

There was a motion of no confidence as well which did not help the case of the culprit. Political parties called for a motion of no confidence on Pres. Jacob Zuma as they were trying to get him to step down. This motion was as always not acknowledged and therefore it became a notion of no hope. Bad news begets bad results as that motion caused the rand to spike as well.

There werent too many economic news released but the few that were release were good news but the major events just overshadowed what should have been a good week for the Rand:
– Business confidence: Up from 90.3 to 93 points. This indicates that more South African consumers and businesses are confident with goods and services in the country.
– Gold production(YoY): Up from -8.4% to -7.0%. Very important as Rand strength comes primarily from Gold.
– Mining production: Up from 0.1% to 3.4%. This means production in the mining sector is growing and getting stronger. This should deliver more natural goods and help boost the economy.
– Manufacturing Production (MoM): Up from -1% to 1.5%. A continued rise in manufacturing in South Africa. More businesses are making goods and this will provide more exports which will assist in helping boost the economy.

Well even though there were some positive news, the major events that occurred during the week seriously overshadowed the rand and puts the Culprit at serious risk of a major ratings downgrade.

My bias is bearish on Rand… Long road to freedom for this fallen currency

USDZAR DAILY

The rand had been making a series of lower lows and lower highs. This week saw the rand do the opposite due to elections. Rand is currently heading towards the MM4 on the pivots. Currently the the pair is at the has reached 50% on stochs and is heading towards the overbought region. There is resistance at the 14.42 level which if broken will enable the pair to continue its losing streak.

USDZAR H4

The pair opened at WPP and sought some strength before the elections. It fell straight to the WM1 profit zone and shot up to Wr3 at weeks close. Overbought stochs are showing and its at resistance. The pair was in the fibzone when it reached dynamic support and ripped through its target as well.

5 thoughts on “USDZAR weekly review”

  1. Ryan Gandalf van Jaarsveld says:

    Thanks bud – how has the drop in Gold impacted on Zar? Also – what are the conditions of the ratings downgrade, is there anything we should keep an eye on that will impact that?

    1. Dalmas Ngetich - FOREX.TODAY says:

      Zuma playing around with the Economy. Always changing Finance ministers like clothes and it won’t be good for the financial markets. I’m looking forward to short the Rand in the short to medium term-for atleast 3 months, if there is a downgrade below the current BBB status, it will be a party.

      1. Maryna says:

        It’s a party already Dalmas, thanks for your observations!

    2. Dalmas Ngetich - FOREX.TODAY says:

      Hey Ryan, for Gold I relate its performance with the gold Eagle company: ticker symbol-AEM- which is one of the leading in the industry. right now it is doing badly and flying low, as it is turning from the overbought territory in the monthly chart. I will look to short Gold while banking on the strengtening USD and of-course the rate hike next month as the Feds look to mess the markets up.

      1. Ryan Gandalf van Jaarsveld says:

        Thanks Dalmas – which broker offers that?

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