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USDZAR: South African Rand Rally Pauses on Risk Aversion

USDZAR
USDZAR

The USDZAR pair rose by more than 0.25% today as traders digested news that Donald Trump had contracted coronavirus. The pair is trading at 16.6430, which is higher than yesterday’s low of 16.54.

In a statement earlier today, Donald Trump revealed that he had infected the Covid-19. Melania Trump, his wife, and Hope Hicks, a senior aide, have also tested positive. As a result, experts believe that other senior administration officials have also contracted the illness. This announcement has sent shivers around the world, with most people worried about what will happen next.

As a result, the US dollar, Japanese yen, Swiss franc, and gold have all risen while US and European equities have declined. That is because analysts consider the former assets to be safe havens.

Indeed, the dollar has risen across other developed world and emerging market currencies, including the South African rand.

Meanwhile, the USDZAR pair is also waiting for the nonfarm payrolls numbers that will come out later today. Analysts believe that the data will show that the US added close to a million jobs in September while the unemployment rate fell for the sixth consecutive month.

USDZAR technical outlook

The USDZAR is trading at 16.6667, which is a few pips above today’s low. On the daily chart, the price is along the 50% Fibonacci retracement level. It has also dropped for the past three consecutive days. Also, it is below the 25-day and 15-day exponential moving averages.

Therefore, I suspect that the pair will resume the downward trend and possibly test the support at 16.00. On the flip side, a move above the resistance at 17.00 will invalidate this trend.

USD to ZAR technical chart