Welcome to another AspireFX blog, we will be going through some technical analysis on the South African Rand versus the US Dollar as well as which fundamentals will come into play this week.
On the daily time frame, placing the Fibonacci tool from where price gapped to the upside at the beginning of the current bull run (the gap in price was due to the announcement of lock down in South Africa), and then placing it at the higher high, we can see that we’ve had a retracement to the 78.6 which we rejected nicely with a massive bullish engulfing forming a higher low. Since then, we have been consolidating above the R17 mark, closing below R17 at the end of last week. If we can close above R17 today, that will print a three pin pattern to the upside.
On the 4 hour time frame we can see how pivotal the R16.90 region has been where it has been acting as a major key level providing support and resistance shown by the red arrows. Placing the Fibonacci tool, we’ve had 3 rejections off of the 50 as well as 3 touches off of the ascending trend line which all indicate further upside movement.
From a fundamental aspect, for us to see further upside movement on this pair, we’ll need the dollar news for the week to come out positive. We have various PMI data releases coming out later this afternoon, the most important being the ISM Non-Manufacturing PMI which is based on Business Activity, New Orders, Employment and Supplier Deliveries which gives an overall indicator for economic activity in the non-manufacturing sector. The JOLTs Job Openings coming out tomorrow is also worth noting, along with the Initial Jobless Claims being released on Thursday and the PPI data which comes out on Friday.
Over the next couple of weeks, we could see the rand weaken further but it all depends on how well the dollar performs. Remember to always stick to your trading plan! Hit the follow button below to receive blog posts updates sent directly to your email.