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USD/ZAR Outlook: ZAR Remains Resilient Despite Dismal Economic Data

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South African Rand Forecast:

Dismal Economic Data Weighs Heavy on the Rand

South Africa’s unprecedented GDP figures sparked panic after Statistics South Africa (Stats SA) confirmed that GDP had contracted by 51% in Q2 2020 and by 17.1% YoY (Q2), SA’s largest annualized contraction in historical past.

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Though the rising market continues to be experiencing the primary wave of the Coronavirus pandemic, the easing of lockdown measures boosted hopes of a financial restoration however optimism was brief lived after energy utility, Eskom, reimplemented load shedding (rolling blackouts), hindering enterprise productiveness.

Over the following six weeks, focus will likely be on the mid-term funds speech, the place South Africa’s Minister of Finance, Tito Mboweni will talk about the highway forward, which is unquestionably not going to be a straightforward one. That is anticipated to happen between 19-26 October, though no official has been confirmed. With Tax revenues lowering and authorities debt growing at a fast charge, threat sentiment will doubtless be influenced by the coverage plans mentioned.

Begins in:

Dwell now:

Sep 17

( 16:09 GMT )

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Fibonacci Retracement Holds Bears at Bay

In August, the ZAR managed to strengthen in opposition to its USD counterpart, primarily attributed to Greenback weak point, however bears have been unable to interrupt by way of the 50% Fibonacci retracement degree (16.635) which continues to carry as help.

USD/ZAR Weekly Chart

USD/ZAR Outlook: ZAR Remains Resilient Despite Dismal Economic Data

Chart ready by Tammy Da Costa, IG

Transferring Common Supplies Resistance

Though the ZAR has fallen in opposition to the US Greenback, bulls have been nonetheless unable to interrupt above 17.00, a key psychological degree. In the meantime, the 50-day Transferring Average has fashioned a further resistance degree, creating downward stress on the pair.

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USD/ZAR Day by day Chart

USD/ZAR Outlook: ZAR Remains Resilient Despite Dismal Economic Data

Chart ready by Tammy Da Costa, IG

USD/ZAR Technique Forward

Whereas financial uncertainty, corruption and mismanagement of funds have raised considerations concerning the restoration of the Rand, the upcoming US elections and rising pressure between America and China, are further elements to contemplate transferring ahead. As elections strategy, volatility between the pair is anticipated rise, which can see value motion gaining momentum in both course.

For now, the 17.00 degree continues to carry as resistance. If this degree is damaged, 17.276, the 38.2% retracement, can be the following degree to be careful for.

Nonetheless, if South Africa is ready to present a strong plan to spice up financial restoration, bears might be able to exert downward stress, in an effort to interrupt under 16.635, the 50% Fibonacci degree which holds as help.

— Written by Tammy Da Costa, Market Author for DailyFX.com

Contact and comply with Tammy on Twitter: @Tams707

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