The United States will release the advance GDP growth rate for the previous quarter on July 30, at 15:30 MT time.
What weakens the South African rand?
The South African currency has weakened on Tuesday. As a result, the USD/ZAR pair has tested its March’s highs near the 14.63 level.
What are the reasons?
· One of the main reason has political roots. Cyril Ramaphosa, the recently chosen president of South Africa, vowed to boost employment and eliminate corruption. However, investors worry about his ability to do that. Their worries increased after the widely expected announcement of the new Cabinet was postponed on Monday.
· The head of Eskom, the South African electricity public utility, Phakamani Hadebe, resigned from his post. Now, the leading state enterprise is expected to report a 20 billion rands loss for the previous financial year.
· Finally, S&P Global Ratings kept South Africa’s credit rating below investment grade on Friday.
· Also, take a note that the escalation the US-China trade war hurts the ZAR as well.
Now investors pay attention to the news concerning the announcement of the new Cabinet of ministers. The decision should be made later this week.
What about the technical levels?
Bulls keep testing the resistance at the weekly pivot at 14.6287. The next resistance will lie at May 28 high at 14.7220. The pair needs to fall below the 14.5215 and 14.4282 levels to resume the bearish pressure. The first support for it lies at 14.3210. If this level is broken, the next key support will be placed at 14.2761 (50-day SMA).
The US unemployment claims are announced on Thursday at 15:30 MT time.
The Australian Monetary Policy Meeting Minutes are announced on Tuesday at 04:30 MT time.
The US NFP will be published on August 7 at 15:30 MT time.
The market sentiment is indeed risk-on today. Stocks, riskier currencies and gold are rising amid the waning US dollar.
Follow the BOE monetary policy and rate statements on August 6 at 14:00 MT time…