Brent oil is currently on a bullish trend, facing resistance near $84 and supported by the 200-day EMA. Breaking above this level could lead to a climb towards $90. Short-term support is observed around $80, backed by the 50-day EMA. As summer approaches and travel increases, crude oil tends to benefit from seasonal patterns. Despite temporary setbacks, buying...
Commerzbank’s forecasts on rand
2020-09-10 • Updated
Commerzbank announced its short- and long- term projections on the South African rand. Let’s discuss it in detail.
Why may rand rise?
Analysts from Commerzbank anticipate the rand will stay at current high levels up to the end of this year and then soar at the beginning of 2021. However, the bank warned that that forecasts will come true, only if the two following conditions are met. First of all, the US dollar should follow its long-term downtrend further. Secondly, the stock market has to keep rallying upwards as the South African rand and equity markets are positively correlated. Indeed, the overall market sentiment has a huge impact on the rand. Since the coronavirus is being taken under control and the global economy is gradually recovering, there are all chances for the emerging market currencies to rise. Elsewhere, most world’s largest economies established low rates for longer, which will force investors to flow their capital to countries with higher yields such as Southern Africa.
Why may rand fall?
However, concerns over the heavy debt levels in South Africa may push the rand down in the medium term. The country’s rate was downgraded to the “junk” level even before the coronavirus pandemic. Lockdowns, restrictions, and the overall economic downturn have made the debt crisis more likely to happen in South Africa. Anyway, investors can shrug off the risk of the debt crisis for now. The more urgent problem is US-China escalating tensions, which weigh on the overall sentiment and the stocks’ performance, which are closely linked with the riskier currencies like the rand. Moreover, the South African crumbling infrastructure such as electrical problems, doesn’t allow the country to recover fast. It will take a lot more time to rebound after the virus slump, which may have a negative effect on the rand as well.
Forecasts in numbers
Commerzbank anticipates the rand will fall a little bit, pushing USD/ZAR to climb from 16.66 on Thursday to 16.70, which is an upgrade from the initial Commerzbank’s forecast for USD/ZAR of 17.0. As for the long term, the rand is going to surge higher by the middle of 2021 after driving USD/ZAR down to 16.30.
USD/ZAR is stuck in a range between 16.60 and 17.00. The move above the top of its range will drive the price to the high of August 17 at 17.50. In the opposite scenario, if it drops below 16.60, the way towards the support of 16.40 will be clear.
Bearish Scenario: Sales below 78.99 with TP1: 77.93, TP2: 77.45, and upon its breakout TP3: 76.56 and TP4: 75.70 Bullish Scenario: Purchases above 78.00 (wait for a pullback to this area) with TP1: 1679.00 (uncovered POC*), TP2: 79.33, and TP3: 79.66 intraday
Amid uncertainty driven by geopolitical events, oil prices surged to record highs. However, a correction in oil prices is observed with a gradual improvement in the situation in the Middle East and an increase in demand. The question facing investors is whether there are prerequisites for further price growth or if everything depends on the dynamics of the political landscape. In this article, we will explore the impact of recent events on the global oil market and the prospects for developing this crucial commodity sector.
On Friday, the gold price (XAUUSD) retreated from a recent two-week high, facing selling pressure. This decline was driven by hawkish minutes from the FOMC meeting, indicating the Fed's reluctance to cut interest rates. Elevated US Treasury bond yields, supported by a "higher-for-longer" narrative, further weakened demand for gold...
Bearish Scenario: Selling below 22.65 with TP1: 22.34 (intraday) and TP2: 22.02 (swing). Bullish Scenario: Buying above 22.70 with TP1: 22.90.
Intraday and swing scenarios based on price action and volume profile.