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USD/ZAR Techs Looking Heavy around 14.50 - Local Political Risks in Focus

SOUTH AFRICA
  • USD/ZAR is consolidating somewhat at the open, having failed to close below 14.50 in yesterday's session on broad based USD selling and upside in equities post-ISM.
  • Commodities trading mixed at the open, giving little support to ZAR: gold 0.23%, Platinum -0.24%.
  • Focus this week on local politics as rumours of protests in support of ANC SG Magashule and demands for the recalling of Ramaphosa and his cabinet circulate.
  • We can expect this theme to dominate in coming weeks as Magashule's 30-day deadline to step aside comes closer, and factional splits in the ANC become more deeply ensconced.
  • USD/ZAR techs are looking heavy on the daily following yesterday's large bearish engulfing candle, but will need to overcome key support at 14.5159 and 14.3966 before unlocking more downside.
  • A relatively quiet local scene vs high-beta peers TRY & RUB has made ZAR the safer bet in recent weeks and coupled with a strong current account surplus & subdued inflation – should continue to keep it attractive.
  • Intraday Sup1: 14.5159, Sup2: 14.39, Res1: 14.6173, Res2: 14.7158
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com

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