My outlook remains unchanged. Possible reversal towards R.15-00
The rand ended the week above the current 14.60 pivot testing lows of 14.56 late in yesterday's European session and highs of 14.70 on Thursday. The DXY also seems to be recovering after a recent selloff resuming upward momentum. From a technical perspective, the rand is currently caught between the 100 day SMA and 200 day SMA on the 1-day graph. Currently momentum indicators are pointing towards a divergence (bounce) on the 4HR graph towards possible R.15-00 with preceding standard pivot points at 14.74, 14.78 and 14.87 respectively.
The coming week has some key events happening for the ZAR such as mini-budget speech on Wednesday, October 30 at 14:00 and the Moodys rating on Friday the 1st of November(usually released after American session close.) Both these events can cause high levels of volatility.
In my opinion, it is best to exercise caution in the coming week as often budget speeches have the tendency to disappoint the market and may cause a knee jerk reaction on the rand. (the last budget speech on the 20th of Feb caused a 46c deviation with the rand on the 1d graph)
With regard to the impending Moodys rating, it is widely anticipated that they will not downgrade us this year. With Eskom remaining a very large thorn in South Africas side, it is not yet a foregone conclusion depending on the contents and details of the mini-budget speech, that a downgrade surprise is not entirely off the cards yet.
The coming week has some key events happening for the ZAR such as mini-budget speech on Wednesday, October 30 at 14:00 and the Moodys rating on Friday the 1st of November(usually released after American session close.) Both these events can cause high levels of volatility.
In my opinion, it is best to exercise caution in the coming week as often budget speeches have the tendency to disappoint the market and may cause a knee jerk reaction on the rand. (the last budget speech on the 20th of Feb caused a 46c deviation with the rand on the 1d graph)
With regard to the impending Moodys rating, it is widely anticipated that they will not downgrade us this year. With Eskom remaining a very large thorn in South Africas side, it is not yet a foregone conclusion depending on the contents and details of the mini-budget speech, that a downgrade surprise is not entirely off the cards yet.