USD/ZAR will likely buck its usual August trend
August 16 (Reuters) -While USD/ZAR seasonality normally entails a spot rise in August, the weekly chart points to bearish trading persisting into month-end.
USD/ZAR's August performance since 2000 shows it has risen in 18 of the past 24 years, or 75% of the time. Seasonality should not be considered in isolation, instead it needs to be corroborated, which does not seem to be the case in 2024.
South Africa's rand was not deterred by dollar gains on Thursday, firming after stronger-than-expected U.S. economic data and as markets look toward Federal Reserve comments at the Jackson Hole meeting of global central bankers next week. The relative strength of the rand has kept USD/ZAR's bias on the downside.
USD/ZAR's price action last week, where spot closed well off the 18.6850 August 5 peak, points to a rejection of the upside. Fourteen-week momentum remains negative, reinforcing the bearish market structure. USD/ZAR is at risk of a drop under the June 17.8700 base, below which losses would accelerate further.
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Weekly Chart: https://tmsnrt.rs/3M5cAeZ
(Martin Miller is a Reuters market analyst. The views expressed are his own)
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