Forex Market: USD/ZAR daily trading forecast

Yesterday’s trade saw USD/ZAR within the range of 10.5964-10.6636. The pair closed at 10.6461, gaining 0.33% on a daily basis.

At 8:07 GMT today USD/ZAR was up 0.10% for the day to trade at 10.6572. The pair broke the first key daily and the first weekly resistance levels and touched a daily high at 10.6787 at 5:10 GMT.

Fundamental view

United States

At 18:00 GMT the Federal Open Market Committee (FOMC) will release the minutes from its meeting on policy held on July 29th-30th. The minutes offer detailed insights on FOMC’s monetary policy stance. This release is closely examined by traders, as it may provide clues over interest rate decisions in the future. High volatility is usually present after the publication.

South Africa

The annualized index of consumer prices (CPI) in South Africa probably fell to 6.4% in July from 6.6% in the prior month. The index measures the change in price levels of a basket of goods and services from consumer’s perspective and also reflects purchasing trends. The CPI in the country has been rising since October 2013.

The key categories in the consumer price index are Housing and Utilities (accounting for 24.5% of total weight), Transport (16.4%) and Food and Non-Alcoholic Beverages (15.4%). Others categories include Miscellaneous Goods and Services such as personal care, insurance and finance (14.7%), Alcoholic Beverages and Tobacco (5.4%), Household Contents, Equipment and Maintenance (4.8%), Recreation and culture (4.1%), Clothing and Footwear (4.1%). The least share of total weight belongs to components such as Restaurants and Hotels (3.5%), Education (3.0%), Communication (2.6%) and Health (1.5%).

In case the CPI slowed down more than projected, this would have a bearish effect on the rand. Statistics South Africa is to release the official report at 8:00 GMT.

Technical view

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 10.6354. In case USD/ZAR manages to breach the first resistance level at 10.6743, it will probably continue up to test 10.7025. In case the second key resistance is broken, the pair will probably attempt to advance to 10.7415.

If USD/ZAR manages to breach the first key support at 10.6067, it will probably continue to slide and test 10.5682. With this second key support broken, the movement to the downside will probably continue to 10.5399.

The mid-Pivot levels for today are as follows: M1 – 10.5541, M2 – 10.5877, M3 – 10.6213, M4 – 10.6549, M5 – 10.6885, M6 – 10.7221.

In weekly terms, the central pivot point is at 10.5854. The three key resistance levels are as follows: R1 – 10.6498, R2 – 10.7073, R3 – 10.7717. The three key support levels are: S1 – 10.5279, S2 – 10.4635, S3 – 10.4060.