You win some, you lose some...
...and the Rand could not seem to decide which it was going to do this past week.
After dodging the #JunkStatus bullet, there was expecting to be a bit of positive sentiment coming into this week - but unfortunately, no matter what bullets the Rand dodges, another always seems to appear.
With the Italy's vote not to leave the EU, Guptas, Zuma and more in the news again, there wasn't a whole lot more to cheer about this week.
Despite that, the Rand pulled a few good moves out of the hat - let us take a look at how it happened, and what we can expect for the coming final weeks of the year...
How It Happened (5-9 Dec 2016) |
Monday opened with the Rand trading at 13.85 after a barn-storming Friday, where it pulled off a near 50c heist in a matter of hours before consolidating back to this level.
There was a good feel about the week from an economic perspective, but still some underlying doubts... particularly that this is the last time that SA is going to dodge the bullet.
And this left the sentiment pretty divided... as was shown in the forecast on Monday morning as a 50/50 split was accurate for the time being, with 2 wave counts busy playing themselves out...
We were going to need to watch this one very carefully.
Click to enlargeSo without any further adieu, the week began...
...and on the whole, it began pretty well for the USDZAR.
After Italy's choice to stay in the EU the day before, the Euro may have been the bigger currency to watch, as the EURZAR weakened more than 20c on Monday...
The Rand was stable for Monday until the late afternoon, where it actually started to push the Dollar back a bit, and actually ended up strengthening by 20c by the end of the day, from where it began...
Our invalidation point had be run close at R13.69, but not quite as the Rand bottomed on Monday at R13.704.
Despite the consolidation of 10c or so after business hours on Monday, this was a great start to the week, and everyone was hoping it was going to continue.
The Dollar weakness may have had something to do with the ongoing questions/worries/confusions in America over the presidency. While President-Elect Donald Trump is selecting his presidential staff, recount allegations and accusations continued to rage with Jill Stein's clever money-making scheme appearing to work for her.
A lot appears to be hanging, or so person's say, on what Trump's policies are. Some are even going as far to say that #JunkStatus is less important than those decisions.
But anyway... let us move onto Tuesday.
Tuesday began with markets settled in the mid R13.70s...
...but not for long!
Shortly after business opened on Tuesday, the Rand got a move on, and almost before we knew it, it was under R13.60 and going strong!
Our invalidation point for Count #1 had been broken... this could be the trigger for Count #2 to play out very quickly...
...but then...
The Rand just settled again, seemingly out of the blue... a bit of a confusing week thus far really, with quite a bit happening but not a lot happening to cause it really.
As the calm arrived at about R13.58, the Rand began a slow consolidation for the remainder of the day, as some real calm was restored to the markets.
And so, Wednesday morning arrived - current situation report on the Rand saw it just over R13.65 to the Dollar.
And boom!
Out of the blue, it did it again!
Confusing Movements..??
As if attempting to make a good looking mirror image, the Rand pulled off an almost identical pin drop in the first hour of business.
Another downward spike had sent the Rand a further 15c down, and things were starting to look pretty rosy.
Not just for the general public, but for us as well.
The Rand had gone perfectly into our target area of Wave Count #2 (R13.58-13.40), and now was expected to bottom out shortly.
As seen on the previous day, we saw some consolidation come in briefly after the morning's antics. But, it did appear that the Rand had some more in the tank, as it went a bit further during the rest of Wednesday.
A best level for the past month was hit with a level of R13.44 late on Wednesday night...
...but that was as good as it got!
Thursday morning was forecast day once again, and something had to give for the Rand.
And our forecast (snippet shown to the left) showed quite a picture clear picture as to what the expected outcome would be...
A bottoming out was expected in the same zone as Monday, of 13.58-13.40, but after that it was supposed change things pretty fast, pushing back above 13.80.
And so the day began...
And for the 3rd morning in a row, the Rand was NOT waiting around for anyone to wake up!
Even if no one else was going to, it was going to have an early start and get cracking with the Thursday ahead!
It ended with a day's range of over 27c, with a low of 13.45 and a high of 13.82!
All that had been gained in the past 2 days had been lost in 6 hours...
...but then, it came back again, in a couple of hours...
A pretty volatile time, and while seemingly nothing should be triggering these moves, the market was moving in line with where our sentiment patterns were predicting it would go.
So as the dust settled after an eventful day, a more stable level of R13.65 or so, seemed to be the close for the day...
Which left just one more day left after an eventful week... and that was Friday.
A lot hung on Friday but not much came out of it...
The day was fairly calm from the moment it dawned, as the Rand gently weakened through the day, as per our forecast, moving closer to R13.80/$.
This was despite South Africa's Current Account announcement at 10am, that the Rand gently sailed to the end of the week...
All in all, not much had come out of the week at all.
The Rand had taken a good dip, but everything had been lost in the latter half of the week.
Our forecast was playing out as expected with the Rand weakening toward the second half of the week, having bottomed out in our target area.
But everything can change in an instant, and so we waited to see what Monday's wave count would say...
The Week Ahead (12-16 Dec 2016) |
Another week. And another week starting with a slightly uncertain footing.
We are right into the middle part of December, and all the memories of December 2015 are likely to coming flooding back.
That time was possibly one of the worst in SA's history, and no one wants a repeat.
Yet, with politics still having all the fingers in the pie with economics, anything is possible. We need to be careful as we look toward the end of this year.
A good investment can turn into a bad investment in almost no time at all.
Take Brexit.
Retail mogul, Christo Wiese of South Africa, lost $453 million in net worth, in just a few hours through Brexit. One wrong investment, and all that money disappeared.
This is why we need a gameplan for the future. A roadmap for what is coming around the next bend. Is it a sharp dip? Or an enormous hill? Or perhaps a gravel road?
This knowledge can be crucial to you travelling safely through to your destination...
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