(MENAFN- DailyFX) RAND ANALYSIS & TALKING POINTS - Souring risk appetite hurts rand.
- South African commodity exports does its best to limit ZAR losses.
- R18.50/$ a very real possibility.
USD/ZAR FUNDAMENTAL BACKDROPThe remains depressed against the after the 's narrative triumphed over the recent 'Fed pivot' reports shared by markets. More recently, escalating tensions in Ukraine have bolstered the dollar's appeal as risk aversion overshadows riskier assets such as including the rand. In addition, a global slowdown and fears weigh negatively on the local currency but one saving grace for the South African economy has been the energy crisis plaguing Europe. Due to lack of consistency in terms of supply, many European nations have now turned to coal usage of which South Africa is a major producer. In 2022 alone, coal exports have increased +/- 11 fold giving some support for the ZAR and with the winter months approaching, the trend may intensify.
Earlier today (see economic calendar below) the manufacturing production statistics for South Africa beat estimates on both MoM and YoY metrics which echoes the increase in demand for certain South African exports. This evening Fed speakers dominate the agenda as markets keenly await U.S. data later in the week.
ECONOMIC CALENDAR
Source:
TECHNICAL ANALYSIS /ZAR DAILY CHART
Chart prepared by , IG
Daily USD/ZAR shows bulls pushing yesterday's fresh yearly highs at 18.2357 which is likely to be breached and expose the 18.5000 resistance handle. While bearish divergence is still developing as indicated on the , there is still room for further upside towards RSI resistance (red) – coinciding with the overbought region.
Resistance levels:
Support levels:
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