The USDZAR price is down by 0.25% today because of the overall weaker US dollar and the relatively better South Africa’s unemployment rate data. The South African rand is trading at 15.600, which is slightly below yesterday’s high of 15.7300.
The South African Bureau of Statistics (SABS) released relatively mixed economic numbers today. The data showed that the unemployment rate jumped from 23.3% in the second quarter to 30.80% in Q3. That happened as the number of unemployed South Africans increased from 4.3 million to 6.5 million.
In the same quarter in 2019, the country had more than 6.7 million unemployed people. Still, the unemployment rate was better than the 33% that analysts were expecting.
Another data showed that gold production declined by 0.7% in September. That was an improvement from the previous month’s decrease of 14.1%. On a month-on-month basis, the production declined by 2.8%, worse than the consensus estimate of 1.5%. In August, the volume declined by 3.8%, which is evidence that the production is coming back.
The USDZAR pair is also falling because of the overall weaker US dollar. The dollar index is down by more than 0.25% as traders continue reacting to the latest news on the vaccine. Later today, it will react to the October inflation data from the United States.
On the four-hour chart, we see that the USDZAR price formed a triple-top pattern at 15.7300 yesterday. Since then, it has moved a few pips down and is trading at 15.600. The price is also below the descending pink trendline that connects the highest points in September, October, and November. Also, it has just moved below the 25-day moving average.
Therefore, because of the triple top, I suspect that the strength of the South African rand will remain in the near term. If this happens, the next level to watch is this month’s low of 15.21. However, if it moves above this week’s high of 15.70, it will invalidate the bearish trend.
