SUMMARY: Buy Now
Moving Average: Buy
Technical Indicators: Buy
Fundamentals USD/ZAR: Buy/Sell
USDZAR Live Chart
Technical Review by IRONFOREX
USDZAR traded lower during the European morning Monday, after hitting resistance at the 12.0900 (R1) barrier. Given that the pair is trading within a possible minor-term downside channel, I would expect the forthcoming wave to be negative and perhaps target our support line of 11.8700 (S1). However, we see that the rate has been oscillating between the support area of 11.7350 (S2) and the resistance zone of 12.2050 (R2) since the 20th of March, thus I would see a sideways medium-term path. This is also confirmed by our daily oscillators as well. Both the daily MACD and the 14-day RSI stand close to their equilibrium lines and point sideways. As for the major trend, if we plot the weekly chart, I see an uptrend. The rate has been trading above a major uptrend line taken from back the lows of July 2011.
• Support: 11.8700 (S1), 11.7350 (S2), 11.6100 (S3).
• Resistance: 12.0900 (R1), 12.2050 (R2), 12.3450 (R3).
Fundamental Review by IRONFOREX
The South African rand traded slightly higher against the dollar after the South African Reserve Bank Deputy Governor suggested that the country has less flexibility on interest rates as the outlook for inflation deteriorates. However, on Wednesday, the headline CPI rate for March is expected to rise a bit, while the core CPI is forecast to remain unchanged in pace from the previous month. Even though inflation is expected to remain within the Bank’s 3%-6% range target, I would expect ZAR to strengthen somewhat, at least temporarily.
Factors Influencing the USDZAR
- Interest rate and capital inflow.
- Monetary policy
- Price inflation
- Retail sales
- Confidence and sentiment
- Economic growth (GDP)
- Balance of payments
- Commodity prices. As the price of commodities rise – the ZAR strengthens and when commodity prices fall the currency also weakens.