South Africa Rand Forecast: USD/ZAR, GBP/ZAR, EUR/ZAR Price Levels

(MENAFN- DailyFX) Rand Price Analysis:

• USD/ZAR confined to current support
• GBP /ZAR tests trendline resistance
• EUR /ZAR remains bound by Fibonacci support

The South African Rand has managed to maintain the downward trajectory against major currencies, buoyed by increased risk sentiment and US Dollar weakness. Despite a reduction in the number of new Covid-19 cases, the South African variant continues to hinder the progression of the vaccination program with the Johnson and Johnson vaccine displaying the highest level of effectiveness towards the unique strain. With the first batch of J & J vaccinations arriving earlier this week, healthcare workers are now eligible to receive the inoculation although further details regarding the rollout to the greater population remains vague.

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With the effects of the Coronavirus pandemic exasperating the dire state of an already somber economy, a catalyst for price action rests in next week's highly anticipated annual budget speech, delivered by South African Finance minister Tito Mboweni on Wednesday 24 February 2021. As private individuals brace themselves for further tax hikes, high levels of corruption have resulted in the collapse of several State Enterprises including power utility Eskom, placing further strain on companies and individuals alike and causing further reductions to economic output, creating further pressure on the government to bring forth a plan of action to address the shortfalls in current economic policy.

Emerging Market (EM) currencies have benefited from an increase in risk-on sentiment , weighing heavily on the US Dollar , allowing for bears trading USD/ZAR to hold their ground below the key psychological level of 15.00 which continues to provide resistance for the pair. For now, price action remains below both the 50 and 200-Day Moving Average (MA) with the Moving Average Convergence/Divergence (MACD) resting below the zero line. Although bears may be eager to test the 14.00 level, the December 2020 lows may continue to limit further declines, forming a wall of potential support around the 14.50 level.

USD /ZAR Daily Chart

Chart prepared by Tammy Da Costa , IG

GBP /ZAR continues to trade within a well-defined range, between the key psychological level of 20.00 (current support) and the declining trendline . With price action currently testing the 50-Day Moving Average, the key Fibonacci retracement levels from the 2016 move will likely provide additional support and resistance for the pair for the foreseeable future.

GBP /ZAR Daily Chart

Chart prepared by Tammy Da Costa , IG

EUR /ZAR bears currently remain bound to the 61.8% key Fibonacci level of 2020 move, providing support at 17.67, with the MACD crossing the zero line, entering into negative territory. If bears break below current support, they may be able to test 17.00 but if bulls manage to take the reins, a test of 18.00 maybe highly probable in the short-term.

EUR /ZAR Daily Chart

Chart prepared by Tammy Da Costa , IG

--- Written by Tammy Da Costa, Market Writer for DailyFX.com Contact and follow Tammy on Twitter: @Tams707

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