USDZAR
The USD/ZAR is heading strongly into the third day of gains, as easing US long-term bond yields leaves the greenback struggling for demand this Thursday. This also follows the underwhelming inflation report of Wednesday, which showed that US Core Consumer Price Index rose by only 0.1% monthly, which was less than the 0.2% that the market was expecting. This put off buyers from US bond yields and consequently the US Dollar, allowing the carry trade opportunities that were seen in February to return.
Fears that a faster economic recovery in the United States could lead to a faster tapering of the Fed’s QE program and therefore higher lending rates quickly dissipated with the inflation numbers, allowing the higher-yielding risk currencies like the rand to stage a comeback.
The USD/ZAR is trading 1.13% lower as of the time of writing.
The active daily candle is challenging the support line at 14.89528. If this level fails to hold, the USD/ZAR could plunge further towards 14.71708 and possibly 14.54458.
On the other hand, if 14.89528 can hold, and the yields-driven demand returns on the US Dollar, then we could see the 15.21122 price resistance come into the picture, with the possibility of 15.32751 and 15.49032 also coming into the picture as potential upside targets. Clearance of the latter turns the short-term bias bullish.
