Forex Market: USD/ZAR daily trading outlook

Yesterday’s trade saw USD/ZAR within the range of 11.3365-11.2030. The pair closed at 11.2200, shedding 0.48% on a daily basis.

At 9:46 GMT today USD/ZAR was up 0.21% for the day to trade at 11.2441. The pair held in a daily range of 11.2073-11.2508.

Fundamental view

United States

The US Census Bureau is expected to report at 15:00 GMT that US wholesale inventories expanded by 0.4% on a monthly basis in September, following a 0.7% gain in August. If confirmed, this would be the 15th straight month of expansion.

This indicator represents the change in stockpiles of unsold goods held by wholesalers. Generally speaking, an inventory pileup signifies slowing sales and thus an economic slowdown, while a lower inventory level points to a more robust growth.

A separate report by the Mortgage Bankers Association is projected to show that mortgage applications fell by 0.2% last week, following a 2.6% decline during the preceding five-day period and a 6.6% drop in the week before. This indicator measure the change in the number of new applications for mortgages backed by the MBA during the respective week.

South Africa

Retail sales in South Africa probably rose at the annualized pace of 2.2% in September, Statistics South Africa is expected to report at 11:00 GMT, following a 2.1% gain in August. Month-on-month, sales on the retail level are projected to have risen by 0.3% after gaining 0.6% in the preceding month.

The retail sales index provides key information in regard to consumer spending trend in a shorter term. Statistics South Africa conducts a monthly survey of the retail trade industry, encompassing retail enterprises. This survey is based on a sample drawn from the 2004 Business Sample Frame (BSF), which includes businesses registered for value-added tax and income tax.

In case sales rose more than anticipated, this would have a bullish effect on the rand.

Technical view

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 11.2532. In case USD/ZAR manages to breach the first resistance level at 11.3033, it may continue up to test 11.3867. In case the second key resistance is broken, the pair could to advance to 11.4368.

If USD/ZAR manages to breach the first key support at 11.1698, it may continue to slide and test 11.1197. With this second key support broken, movement to the downside could extend to 11.0363.

The mid-pivot levels for today are as follows: M1 – 11.0780, M2 – 11.1448, M3 – 11.2115, M4 – 11.2783, M5 – 11.3450, M6 – 11.4118.

In weekly terms, the central pivot point is at 11.2105. The three key resistance levels are as follows: R1 – 11.4130, R2 – 11.5660, R3 – 11.7685. The three key support levels are: S1 – 11.0575, S2 – 10.8550, S3 – 10.7020.