Technical analysis: Will USD/ZAR quotes continue to decline?

Dmitry Lukashov IFC Markets

USD/ZAR technical analysis summary

Below 16,84.
Sell Stop.

Above 18,52.
Stop Loss.

Indicator	Signal
RSI	Neutral
MACD	Sell
MA(200)	Neutral
Fractals	Sell
Parabolic SAR	Sell
Bollinger Bands	Neutral

USD/ZAR chart analysis

On the daily timeframe, USDZAR: D1 broke down the support line of the rising channel and approached the 200-day moving average line. It must be broken down before opening a position. A number of technical analysis indicators formed signals for further decline. We do not rule out a bearish movement if USDZAR: D1 drops below the 200-day moving average of 16.84. This level can be used as an entry point. The initial risk limit is possible above the last 2 upper fractals, the upper Bollinger band and the Parabolic signal: 18.52. After opening a pending order, we move the stop following the Bollinger and Parabolic signals to the next fractal maximum. Thus, we change the potential profit/loss ratio in our favor. The most cautious traders, after making a trade, can switch to a four-hour chart and set a stop loss, moving it in the direction of movement. If the price overcomes the stop level (18.52) without activating the order (16.84), it is recommended to delete the order: there are internal changes in the market that were not taken into account.

Fundamental analysis of forex - USD/ZAR

South African Reserve Bank raised the rate. Will USDZAR quotes continue to decline?

The South African Central Bank raised the rate to 7% from 6.25%. Now it has almost caught up with inflation, which was +7.6% y/y in October. This is not much more than September's +7.5% y/y. We note that the South Africa Producer Price Index (inflation in industry) in October fell to +16% y/y compared to +16.3% y/y in September. Signs of slowing inflation may support the quotes of the South African rand. November 29 in South Africa will be significant data on unemployment, November 30 - trade balance and December 1 - Absa South Africa Manufacturing Purchasing Managers Index (index of business activity in industry). There will be a lot of important statistics in the US this week, including the publication of the United States Nonfarm Payrolls on December 2nd.

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Author

Dmitry Lukashov

IFC Markets

Dimtry Lukashov is the senior analyst of IFC Markets. He started his professional career in the financial market as a trader interested in stocks and obligations.

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