South Africa's rand once again showing resilience
Oct 14 (Reuters) -Despite a broadly stronger dollar and nervous risk sentiment, the rand closed up for the week ending October 11. Market chatter suggests that rand long positions are overcrowded but a resilient rand could still push higher again this week.
Early Monday action has shown the rand weakening versus the dollar, possibly reflecting disappointment that China could not provide greater stimulus assurance to the market.
In the rand's favour has been a lack of escalation in the Middle East conflict and this could limit some fallout from the weekend news out of China.
USD/ZAR has started the week on a positive footing but remains below key resistance at Thursday's high of 17.6750 and 17.5900, the 10-day moving average line. A 38.2% Fibonacci retracement level, taken off the 19.3975-17.0375 drop, comes in at 17.9390.
On the support side USD/ZAR is holding above a significant long-term level, 16.9190. The 200-day moving average has supported the market since April 2022 and if the underlying bear trend is to extend, this level will have to give way soon.
On balance the rand still has potential, supported by carry trade attraction and the backing of a bull trend, in place since October.
For more click on FXBUZ
USD/ZAR daily candle chart: https://tmsnrt.rs/4eTIAiu
(Peter Stoneham is a Reuters market analyst. The views expressed are his own)
</body></html>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.
