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ZARJPY Approaching Important Support Levels

SOUTH AFRICA
  • ZARJPY has been retracing lower in the past few days amid rising political uncertainty (Zuma judgement) but also due to the surge in uncertainty over the Delta variant.
  • The pair is approaching important support levels, first at 7.70 (low range of the upward trending channel), followed by 7.60 (61.8% Fibo retracement of the 2021 low high) and then 7.56 (100DMA).
  • A break of these levels could indicate the start of a strong bearish momentum on ZARJPY.
  • As a reminder, the ZAR has been a one of the biggest winners in the risk on environment that we have experienced in the past year, up near 40% against USD (and JPY) since its April low.
  • A rise in risk aversion could also be market by strong consolidation in ZAR.

Source: Bloomberg/MNI

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