ZAR: the Minister's power

ZAR: the Minister's power

2020-02-26 • Updated

Fundamental

On the H1 chart of USD/ZAR, we can see how this currency pair reacted to the speech of the South African Minister of Finance. Tito Mboweni was speaking for one hour, addressing a wide spectrum of issues in the course of the new budget presentation. The speech was controversial at times but contained certain strong moves and announcements, which – at least, in theory – present significant opportunities for the country to exit the economic stalemate it is in now and move ahead.

The solutions mentioned by Mr. Mboweni ranged from ensuring reliable state-wide electricity supply and increasing taxes on cigars and vapes to establishing a new state reserve fund and dealing with wage disparities. Therefore, from the external observers’ point of view, the speech was full of good indications, without further analysis. Hence, the weakening of the USD against the ZAR is natural in such a promising (for South Africa) atmosphere.

However, the intrigue of the current position of ZAR is whether the market players are convinced enough to start buying ZAR and push it down below the marked trend line. This line is roughly the lower border of the long-term upward trend, during which the South African rand has been consistently losing its positions to the US dollar.

Hence, so far the positive impression of Minister Mboweni’s presentation limited its effect to dragging the ZAR down to the border of this trajectory. But will it be enough to break the strategic direction and change the trend? Probably, to do that, the market needs to time-check the strong announcements Minister Mboweni made and verify them against reality. If there are early signs of positive changes, we are likely to see ZAR gain value against the USD. If not – the trend will go just as it has been for almost the last 10 years.

Technical

Currently, USD/ZAR trades at 15.1277. That is where it tests the local support of 15.1000. In the mid-term, this support has strategic importance: if the currency pair breaks it on the way downwards, that means it will challenge 200-MA roughly at 15.0500. Passing it downwards would signal a strategic trend change – as long as it stays below the 200-MA long enough to break the trend. Otherwise, local resistance levels are at 15.1800 and 15.2400. 15.34500 is where the USD/ZAR started its slide down on the speech of Minister Mboweni. If this level is reached again, that means the positive push for ZAR is undone, and the currency pair would aim at 15.4000 in this scenario.

USDZARH1.png

                                                                                          LOG IN

Similar

What Can Drive Oil below $90 a Barrel?
What Can Drive Oil below $90 a Barrel?

The past two years have seen the biggest swings in oil prices in 14 years, which have baffled markets, investors, and traders due to geopolitical tensions and the shift towards clean energy.

What will move the market on September 6-10?
What will move the market on September 6-10?

Last Friday’s NFP was disappointing. The reaction of the markets was astonishing. Will it last longer? Let's find out the main trade opportunities for the upcoming week.

Latest news

Will USDJPY slide lower in 2023?
Will USDJPY slide lower in 2023?

Last year was tough for the Japanese yen. USDJPY gained more than 30% over 2022, striking above 150 in October. While anticipation of slower Fed rate hikes pulled the pair below the 130 level at the start of 2023, the speculations over the destiny of BOJ’s yield control policy grabbed the attention of the Japanese assets in the middle of January. What lies ahead for traders of the Japanese yen?

BoC Rates Could Alter The Trend on USDCAD and others
BoC Rates Could Alter The Trend on USDCAD and others

Today, at 5:00 pm (GMT +2), the Bank of Canada will publish the Overnight Rate, which represents short-term interest rates, and is pivotal to the overall pricing of the Canadian Dollar in the global markets. Let's look at how the markets are faring ahead of the BoC rates release.

MSFT faces gloomy forecasts ahead of earnings report
MSFT faces gloomy forecasts ahead of earnings report

In a call scheduled for January 25, 00:30 am GMT+2, Microsoft will publish the company's earnings for the final quarter of 2022 and comment on the results, projections, and outlook for the nearest future of the company.

Deposit with your local payment systems

Feel the Team Spirit

Data collection notice

FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.

Callback

A manager will call you shortly.

Change number

Your request is accepted.

A manager will call you shortly.

Next callback request for this phone number
will be available in

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later

Don’t waste your time – keep track of how NFP affects the US dollar and profit!

Beginner Forex book

Beginner Forex book will guide you through the world of trading.

Beginner Forex book

The most important things to start trading
Enter your e-mail, and we will send you a free Beginner Forex book

Thank you!

We've emailed a special link to your e-mail.
Click the link to confirm your address and get Beginner Forex book for free.

You are using an older version of your browser.

Update it to the latest version or try another one for a safer, more comfortable and productive trading experience.

Safari Chrome Firefox Opera