The Rand is gaining ground this week in the wake of softer US data. We’ve broken a couple of key technical levels this morning. Initial support at R 13,40 is holding ground at the moment although we have tested lower. The market has lingered around here twice before so there is a fair amount of support at this level.
The next big level down from here is R 13,10. We might see a slight pull back before we test that number, but I think the US Dollar is under pressure and long traders are not going to be climbing in at these levels.
USD/ZAR
On the daily graph, there is plenty of opportunity for the market to test lower. We’ve come off the highs and consecutively set new lower highs in the process. We also broke the short-term trend line when we closed below R 13,65 and we’ve gone through the 100% retracement at R 13,40 this morning. Right now, I’m looking for the market to close below R 13,40 to confirm we’re on target for lower levels.
In terms of buying opportunities, our long-term support line is still very much in play which would putting our initial best short to medium term target in at R 13,05 where the two intersect.
The US economy is strong, however there are concerns that trade tensions will have a big impact on future investment activity. For now, let’s take advantage of it.
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