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ZAR: 50-Day EMA Continues to Cap USD/ZAR Gains

ZAR
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A turbulent session for the rand initially saw USDZAR rally back above the 18.00 mark, as tensions between the ANC/DA over a controversial education bill reignited political headwinds. A >1% rally in gold through the NY crossover combined with comments from the DA leader – which alleviated concern of the threat to the GNU – have since led to a quick turnaround for the rand, with USDZAR now moderately lower at typing.

  • The BER's Inflation Expectations Survey for Q3 will have also played a part in earlier rand weakness. The data supports the case for a SARB rate cut as anticipated price growth moderated across the 2024-2026 horizon, with participants now seeing inflation at +5.1% Y/Y this year.
  • Looking ahead to next week, focus turns to South Africa August CPI data and the FOMC monetary policy meeting, both slated for September 18, the eve of the next SARB meeting.
  • Initial firm resistance for USD/ZAR is seen at 18.0527, the 50-day EMA, which remained intact today. Technical conditions for the pair are bearish overall given the broader price sequence of lower-lows and lower-highs, paving the way for an extension towards 17.5713, the Jul 28 ‘23 low.
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A turbulent session for the rand initially saw USDZAR rally back above the 18.00 mark, as tensions between the ANC/DA over a controversial education bill reignited political headwinds. A >1% rally in gold through the NY crossover combined with comments from the DA leader – which alleviated concern of the threat to the GNU – have since led to a quick turnaround for the rand, with USDZAR now moderately lower at typing.

  • The BER's Inflation Expectations Survey for Q3 will have also played a part in earlier rand weakness. The data supports the case for a SARB rate cut as anticipated price growth moderated across the 2024-2026 horizon, with participants now seeing inflation at +5.1% Y/Y this year.
  • Looking ahead to next week, focus turns to South Africa August CPI data and the FOMC monetary policy meeting, both slated for September 18, the eve of the next SARB meeting.
  • Initial firm resistance for USD/ZAR is seen at 18.0527, the 50-day EMA, which remained intact today. Technical conditions for the pair are bearish overall given the broader price sequence of lower-lows and lower-highs, paving the way for an extension towards 17.5713, the Jul 28 ‘23 low.