USDZAR Still Weak but a Key Support Level is Near

Summary:

The USDZAR has continued to weaken as the greenback falls against global currencies but a key support level in the pair is close.

The USDZAR has continued to weaken as the greenback falls against global currencies but a key support level in the pair is close. The greenback has tumbled after a strong September rally with the resurgence of a second stimulus package, which was thought to be a longshot before the election.

President Trump has accepted a revised $1.8 trillion package but the Democrats are still holding out for something closer to their $2.2 trillion deal, which a Trump advisor has said was not needed for its strengthening economy. Stephen Moore said the third-quarter figures could, “…shatter the record.”

The Rand saw a dip today after data showed the South African factory dropped for the fifteenth month with a 10.8% loss compared to 10.2% previously.

Tomorrow sees inflation data released for the U.S. dollar and the expectation is for a print of 1.4% compared to last month’s 1.3%. A higher figure could save the USDZAR from the recent downtrend with traders having to revise their bets on Fed tightening.

USDZAR Technical Outlook

USDZAR failed to hold two close above the 50-day moving average and has since fallen back to test the support levels near 16.30. This level has held three times since June and will play a significant role in the next direction for the USDZAR. Price action still favors the downside but a buy signal could arise. The Investing Cube team is currently available to assist with trading in currencies with the Forex Trading Course or through one-to-one coaching.