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USD/ZAR On Track to Close Below Key Support

SOUTH AFRICA
  • A close below the 100-day exponential moving average in USD/ZAR today would the first since early June, after the level held as solid support over mid-August. A solid break lower here would open losses toward the 61.8% Fib for the Aug - Oct upleg at 17.0544.
  • An extension of the rally in gold prices could prove to be pivotal for any further ZAR strength, with the correlation between $ gold prices and USD/ZAR at its firmest Q3 2021. Also aiding the strength in ZAR this week is the sizeable drop in the 10y breakeven, now back below 6.50% for the first time since early April as the soft US CPI leads yields lower globally.
  • Focus domestically remains on the sustainability and efficacy of another mandate for President Ramaphosa, with today marking the deadline for the submission of the ANC's internal report into the Phala Phala scandal (last we have seen - this has not been signed off and could be delayed).
  • Notably, Nov 15th marks the publication of branch nominations for the ANC’s elective conference (key to Ramaphosa’s re-election chances) and Nov16th is the deadline for the independent panel to submit their findings on Phala Phala to the National Assembly.
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  • A close below the 100-day exponential moving average in USD/ZAR today would the first since early June, after the level held as solid support over mid-August. A solid break lower here would open losses toward the 61.8% Fib for the Aug - Oct upleg at 17.0544.
  • An extension of the rally in gold prices could prove to be pivotal for any further ZAR strength, with the correlation between $ gold prices and USD/ZAR at its firmest Q3 2021. Also aiding the strength in ZAR this week is the sizeable drop in the 10y breakeven, now back below 6.50% for the first time since early April as the soft US CPI leads yields lower globally.
  • Focus domestically remains on the sustainability and efficacy of another mandate for President Ramaphosa, with today marking the deadline for the submission of the ANC's internal report into the Phala Phala scandal (last we have seen - this has not been signed off and could be delayed).
  • Notably, Nov 15th marks the publication of branch nominations for the ANC’s elective conference (key to Ramaphosa’s re-election chances) and Nov16th is the deadline for the independent panel to submit their findings on Phala Phala to the National Assembly.