ZAR: USD/ZAR Starts the Session on the Front Foot Amid Gold Weakness

The rand is under pressure this morning, with USDZAR up around 0.2% at typing as spot gold extends session losses (-0.35%). The pair had risen as much as 0.7% yesterday, partially undoing some of Friday’s sharp sell-off, before its gains were pared towards the end of the European session. Today’s price actions puts the rand at the bottom of the EMEA FX pile, with performance in the region mixed overall as last week’s rally sparked by dovish Powell comments fades.

• Despite today’s gains, technical conditions for USDZAR remain strongly bearish after the recent move lower resulted in the break of key support at 17.8689, the Jun 21 low and a bear trigger. The break confirms a resumption of the downtrend that started in April and paves the way for an extension towards 17.4193, the Jul 27 ‘23 low and the next key support. Initial resistance remains some way off at 18.0078, the 20-day EMA.
• Focus will turn to the week’s main US data with the second Q2 national accounts release on Thursday before the July PCE report on Friday. In South Africa, PPI figures for July cross on Thursday ahead of trade balance data at the end of the week (Est: ZAR 21.5bn; Prior: ZAR 24.2bn).