Rand Review - 16 Jan 2017

2017. The new year had begun.

The Rand had suprisingly ended December stronger than it had started it, contrary to popular worry amongst South Africans, after the last year's antics.
It shows that gut feel about something is not what you can trust to be consistently accurate...

This week certainly brought back the worrying reminder of just how dangerous the Rand can be, as the latter half of the week was Rand volatility at its best, showing us all what we had been missing during the holidays.

Somehow, the Rand also managed to come out better than it started at the end of the week...

...and on top of that, the market had followed our forecasts almost better than we expected ourselves.

Want to find out how things fared against the dangerous markets? Read on...!

Monday morning.

Back to the grindstone for many, as the new year began in earnest with most businesses reopening.

Big goals, objectives and resolutions had been laid out with care for the new year. And, for those of you with forex exposures, you realize this is your biggest risk factor! It is our goal to help you achieve your goals.

As business opened on the 9th, the Rand was trading in the mid 13.70s. As heading into the first proper business week of the year, there were a few events around in the coming days but not as many as would be expected.

As always, being Monday morning, we released our forecast (see below - click to enlarge) showing where we were going for the next few days.

The Rand was expected to strengthen briefly before bottoming out and rising higher to test pivotal resistance...

Click to enlarge

And for Monday at least, the Rand followed exactly as planned, strengthening from a position close to R13.80 back close to R13.60.

This placed it in a good position for Tuesday, as it was expected to weaken as per our forecast...

...but as always, one needs to watch the markets - generally they have some trick up their sleeves!

Tuesday arrived, and the markets had a fairly good day. There was a strengthening a little further in the afternoon, but then it appeared the Rand had begun to turn, as it pushed higher into the 13.60s again.

All in all, another fairly calm day, giving us little to write about...

...but gentle movement could only last for so long with a currency like the Rand.

Wednesday was the day when the calm began to disappear, as the Rand start bouncing around like a jack-in-the-box.

The market was volatile, unpredictable and dangerous and yet still followed our forecast.

In the first half of the day, we saw it move down to R13.64 before mid-day, before turning around in double quick time.

Before business hours were over, the Rand had moved to a rotten level of R13.97, barely giving us time to blink. However, this was following our forecast perfectly, as we had showed it bottoming out before heading up above a minimum of R13.84.

Just when we thought the volatility could not get any worse...

...it duly did so.

Just after 7pm on Wednesday, the market was back at 13.65 to the Dollar, a full 32c from where it had been two hours ago!

Scary stuff... the Rand was back to its old tricks again!

And then came Thursday, our next forecast day. A difficult one to forecast as the Rand was already on the move when we did our forecast.

When the forecast was issued, the market was sitting at R13.63, showing the Rand had already made moves that morning from above R13.70 to the Dollar.

The outlook (see below - click to enlarge) showed that the Rand was expected to strengthen further during the course of the next few days, with a break below R13.4925 expected.

Click to enlarge

And the market just plowed onwards, showing no sign of stopping.

In less than 24 hours there had been a full 57c swing, from R13.97 down to R13.40/$. Anyone involved in forex would have been tearing their hair out with such volatility, but the Rand had kept in line with our forecast...

In amongst minimal market events, the Rand had been at its customary volatile self, just to welcome us into the new year. Leaving many wondering what on earth had happened to trigger a few days like this.

It had followed our forecast as expected, but the movement and sentiment was still unexplained. It was a day proving you just have to trust the Elliott Wave Principle.

And as Friday dawned, we waited to see what was going to come next...

...and for a while, there was more of a calm in the markets as the Rand had retraced late on Thursday, and appeared to level out a bit more on Friday morning.

In the afternoon, we saw some more jumpy sentiment, as the market moved up to R13.60, and then back down under R13.45, and as South Africa slowly moved into the weekend, the market slowed...

A turbulent week - almost as if the Rand had stored up some energy through the holiday season and had released it all at once!

However, ending the week 20c stronger than it was on Monday, the Rand overall was looking rosy

However, I would not count on that just yet, because we have quite a week ahead...

There are a lot of market events which are economic, but as on top of that we have a Donald Trump inauguration coming up this Friday...

Whenever there is something relating to US Presidency, there is always some action in the markets.

And although this day has been decided for quite some time already, there could well be some action in the markets relating to it, as it is the final closing stage of the USA Presidential Election, with the door finally (and also hopefully), being shut on the controversial campaign.

Once again though - looking at all these events and happenings is overwhelming. We need to look at the bigger picture, instead of individual events.

That is where our forecasts can help you. The big picture, in a small, simple, readable, understandable and accurate format.

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