Rand Sterling exchange hits new 5 year high

GBPZAR hits new 5 year high at 18.11 and USDZAR reaches 10.91 & EURZAR is 14.85

  General Finance Market Outlook:
   
  Still further room for Rand depreciation as US economy strengthens.
Indications from the US Fed is that they may cut back further on their bond-buying program from the end of January 2014.
Slower Chinese growth is still a worry to international investors as the latest Purchasing Managers Index numbers disappoint.
AMCU mine strike begins, effectively shutting down the platinum sector on the eve of the Marikana anniversary.
SARB interest rate announcement to be made at the end of January. The market consensus is that the interest rate will be kept at current levels.
   
   
  Technical Analysis:
   
  The long, medium and short term trends have all moved up. Not just up but aggressively up with all 3 major ZAR pairs knocking on key technical resistance levels.
   
  GBPZAR has broken above the key psychological level at 18.00 and has triggered some stops shooting price up to a high of 18.14. There is potentially a storm brewing here from a technical perspective which needs to be confirmed by USDZAR breaking above 11.00. This is the key move we are looking for to confirm the next move weaker on the ZAR.
GBPZAR breaking above 18.00 is just a ‘heads up’ that the ZAR may be headed significantly weaker. This needs to be confirmed by a break above 11.00 in USDZAR which similarly may result in EURZAR breaking above the key 15.00 level. If GBPZAR, USDZAR and EURZAR all break above key technical resistance levels one after the other then technically speaking we should see the next strong medium term move weaker on the ZAR.
Our one concern from a technical perspective is that the ZAR move looks overdone on the charts. It looks ‘exhaustive’, tired and maybe a bit overstretched.
Technically, we are still ZAR bears and expect it to move weaker BUT we need USDZAR and EURZAR to now break their own key levels at 11.00 and 15.00 respectively or we may see a sharp short term reversal.

 

 

 

USDZAR at 11.00 holds the key for the next move!

 

 

 

Short Term Trend: Up = ZAR Weakness

 

 

 

Medium Term Trend: Up = ZAR Weakness

 

 

Long Term Trend: Up = ZAR Weakness

from exchange4free.com

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