We’ve seen a big move on the Rand in the last week, the question now is, what to do about it?
Another solid day of trading for the Rand yesterday. At 3pm the South African Rand was at R13.35 to the dollar after having peaked R13.308 in intraday trade. As it stands we’re currently trading at R 13,37 to the USD, R 15,70 to the Euro and R 17,72 to the Pound. (08:00 AM)
At this stage, we have two potential short-term scenarios to consider on the USD/ZAR, a small retracement back to the line or to continue lower. You would expect to see the market consolidate after a big movement as traders take profits and square off their positions.
I think the short sellers will climb back in at around R 13,65 to the US Dollar. Either way the Rand is on the front foot at the moment and there is plenty of opportunity for us to move lower. On the daily chart we’re struggling to break that R 13,40 support level, we tested it on the 17th June, again on the 24th June and for a third time yesterday. We’re looking for a daily close below this level to set up for another push lower.
Should I take advantage of the Rand’s recent move ?
Obviously, we’ve seen a big move on the Rand in the last week, the question now is, what to do about it? In a market like this, the sensible approach would be take advantage of opportunities when they present themselves.
From a strategic point of view, if I had invoices on the table and 2 – 3 weeks to play with, I would almost certainly look to reduce some of my risk by securing 50 – 60% of what I know I’ll need. I’ve recovered 60 cents in a week and that’s worth taking. I would then be looking for anywhere around R 13,15 for another buying opportunity.
At R 13,15 to the US Dollar, I would secure the balance of my current invoices and take out an FEC for at least 50 % of my August commitments and 25% of my September commitments. In doing so, I’m both capitalising on current market conditions and proactively managing my risk on future payments.
This Information is provided by fx paymaster. Our Daily Rand Traders view is intended to give you information about the foreign exchange market. The information contained in this currency report is based on our views and opinions. When trading you should always rely on your own judgement.
