CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75.4% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

USDZAR

USDZAR seeing some chunky price moves

Luke Suddards
Luke Suddards
Research Strategist
Sep 1, 2021
Let's take a look below at what you need to know
In these moribund markets you have to move further out on the risk curve and look at more exotic currency pairs for vol and sizeable pip moves - my former place of birth's currency, the rand, doesn't disappoint in this regard. For example, the 14 period ATR currently reads just above 2000 pips. Price has retraced its risk-off losses from 2 weeks prior. There are a couple factors working in the rand’s favour – GDP re-estimation higher, healthier balance sheet of the national electricity provider Eskom, solid rebound in PMI. However, the rand does have a high beta to risk and there are new mutations arising, which if potent enough could sour risk sentiment again and hurt the rand. Additionally, when the Fed starts tightening the screws with their monetary policy (especially if the upcoming job reports are robust), we will see outflows and this will pressure the rand. Lastly, given the strong rallies we've seen in precious metals SA has achieved a significant current account surplus. However, going forward their terms of trade will get hit hard if oil moves higher and gold lower, which to me seems like the probable path for both assets as the Fed tightens (real yields higher - hurts gold ) and the economy reopens.
The RSI hit overbought and signaled the near term top for price. Price is now just below its 200-day SMA and 50-day SMA . A golden cross/death cross looks imminent. There is horizontal support at the 14.5 level. Price is also below its lower trend line of the ascending channel . The target on the downside would be the strong 14.2 horizontal support. On the upside, weakness in the rand could see moves toward the round number of 15.

Ready to trade?

It's quick and easy to get started. Apply in minutes with our simple application process.

Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information provided here, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.