Dollar beginning to lose its way versus the rand
Nov 18 (Reuters) -The dollar has relaxed its grip on the broader market and for the South African rand this has given potential for back-to-back recovery sessions and bearish USD/ZAR signal.
A bearish harami candlestick signal and false break of the 200-day moving average were recorded Friday. The second 200-Day moving average failure since Aug. 5 set up a soft start Monday for USD/ZAR. The average provides a resistance point at 18.2770 today.
Fibonacci retracement levels taken off the September-November 100.15-107.07 rally provide pullback targets at 105.42, 104.43 and 103.61, 23.6%, 38.2% and 50%, respectively.
A daily Ichimoku cloud twist also provides a bear target. The twist out to November 29 has 17.5644-17.5688 parameters.
Fourteen-day momentum remains positive but is beginning to fade, daily relative strength index has turned over ahead of overbought values, and the slow stochastic has backed away from extreme overbought levels.
ZAR investor sentiment has also improved following Friday's South African rating review from S&P. The rating agency raised the country's credit rating outlook to "positive" from "stable".
Investors are also focused on this week's South African inflation data and the Reserve Bank's policy announcement. A cautious central bank is expected to cut by 25 basis points on Thursday. The rate cut is priced into USD/ZAR and as such should have little impact on a recovering rand.
For more click on FXBUZ
USD/ZAR daily candle chart: https://tmsnrt.rs/4hUFjS9
Peter Stoneham is a Reuters market analyst. The views expressed are his own, editing by Ed Osmond
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
