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Trend Needle Still Points South


Timeline of key events (Times BST)


Trading Near Recent Highs


Timeline of key events (Times BST)


Touted Evergrande Grace Period Weighs On Risk


Eyeing The 50-Day EMA

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  • USD/ZAR trades -0.73% lower this morning, seeing some relief after 5 successively firmer sessions.
  • The cross closed +0.17% firmer, but saw a bearish inverted hammer candle formed with the price action as sellers stepped in around the 61.8% Fibonacci level at 14.88.
  • Price action is now approaching the 50 & 200dmas below around 14.50-14.60 which represent the next dynamic supports.
  • Focus today will be on pre-FOMC positioning with markets concerned about a relatively hawkish outcome in the 2024 distribution in the dot plot.
  • Although the SARB decision is expected to be uneventful, focus will shift to discussion of the revised 3-4% inflation target proposal and the bank's assessment of rebased GDP.
  • Sell-side seem to diverge over the path of inflation into yea end with international analysts calling for a +25bp hike by year-end, while local analysts see little scope for tightening out as far as end-2022.
  • We stand closer to the latter with our base case being unchanged to 1Q22, with the possibility of extension should inflation remain broadly contained in the Oct-Nov period – in line with the forecast.
  • Local economists remain relatively optimistic that the current ZAR weakness will be near-term in nature – owing to solid fundamentals.
  • Intraday Sup1: 14.6577, Sup2: 14.5753, Res1: 14.7586, Res2: 14.8632