Break and close above the 50-day MA = 14.73 -> 14.90 Break and close below 14.67 -> 14.55
The USDZAR pair is currently sitting in the consolidative blue triangle. As long as the DXY remains below 92.800 and platinum stays above $1015, I expect the pair to complete an ABC corrective pattern. A break above the 200-week MA rate of 14.59 could however see the pair move into the range between 15.50 and 16.00. The fundamentals that drove the rand stronger in...
It seems as if the USD/ZAR has completed a 5-wave impulse. The MACD is also working into a huge wedge which highlights the maturing rand bull. Possibly time for a correction towards the dotted green neckline if the pair breaks out of its current downward channel. Technical indicators are leaning to more rand losses this week but the dollar's movement will be...
10-year treasury yields technically look set for a move higher after completing an ABC corrective pattern last week. The overbought status of the stochastic and the RSI indicators also point to a move higher. The dollar and treasuries will however be at the mercy of the Fed this week. Weekly candle:
The trajectory of the DXY will be determined by the battle between inflation and deflation. If the narrative of sustained long-term inflation prevails, it will be dollar positive. The Fed is desperately trying to create inflation in this highly indebted economic landscape because inflation erodes the real debt obligation of debtors (the biggest debtor being the US...
There is still some downside potential according to the weekly RSI. 100-week MA may provide some short-term support but for now we're in a directionless range it seems.
My target range for the pair remains at 13.18-13.20. If we assume that wave 5 will be equal in length to wave 3, the pair could however drop as low as 12.75... Fundamentally, the commodity cycle looks far from over which is rand supportive as the rand is a commodity currency (particularly industrial- and precious metal prices).
The rand managed sound gains yesterday which saw the pair drop onto the dotted blue support line. A break below this trend line will allow the rand to pull the pair down towards my long term target at 13.20. The MACD broke below its support line while the RSI is pointing to an overbought rand. A daily close above 13.98477 may invalidate this view. All eyes on...
RSI indicator is currently testing major support. The rand may still pull the pair to 13.18 but the rand's run is maturing.
Just a look at the relationship between DXY and 10 year yields since 2008.
I may be forced to change my view of a drop towards 13.20 if the pair fails to close this week below 14.00. A break above the 30-day MA rate of 14.25 will allow the pair to move into a range between the 200-week MA rate of 14.55 and the 61.8% Fibo rate of 14.51. A close above 14.51 will invalidate the move towards 13.20. The MACD indicator is working into a wedge...
Today the highly anticipated US CPI print for the month of April will be released. A host of Fed speakers were paraded in front of the media yesterday in an attempt to ease the market’s fears for today’s highly anticipated data print, so it could be a blockbuster. A CPI print above 3.6% could see the dollar inch back towards the 61.8% Fibo level of 90.816. A...
Target is at 88.240. The only current factor which could push the dollar out of the navy blue consolidation range is a return of inflationary fears (US CPI will be updated tomorrow). Besides that its on a one way street down to 88.240. Weekly MACD is also set for a cross-over sell signal. A host of repetitive Fed speakers will also be paraded in front of the media...
The DXY once again failed to hold onto levels above the 50% Fibo retracement level of 91.322 for the third consecutive session yesterday which is threatening my view of a move towards the target range between 91.825 and 92.388. Technical indicators on the DXY are still holding buy signals but the momentum is fading. The next support rate for the index lies at...