Welcome to our Weekly Rand Review for 19 September 2016, where we take a look at how things unfolded last week and give you our thoughts for the week ahead.
Successful week? Or just another week in the ZAR tumbledrier?
Purely in Rand value, progress was made this week. But not in the way that many would have liked to have seen. Jumpy, unstable and fidgety movement marked the week, as the Rand eventually strengthened by the close on Friday, by about 25c overall, since Monday morning.
In that way, it was a successful week for the local currency - however, the way it happened was enough to get anyone worried as to the long term outlook.
Not sure what we are talking about? Then read on as we review the past week.
How It Happened (12-16 Sept 2016) |
Monday morning's forecast (see below - click to enlarge) showed that the Rand was due for some short term weakness, as it was expected to top out in the 14.65-14.80 area.
Click to enlargeAs anticipated, the Rand shoot up all of 20c in the course of the morning on Monday - a bad start to the week, but certainly one we should have expected after the Elliott Waves told us the direction for the coming days.
While it rose strongly, it failed to rise as far as the idealized target before reversing. By the close of Monday, the Rand had done its topping out and had strengthened nearly 40c!
Some relief for most of SA - but it did not come without increasing worry.
Volatility was certainly abundant, and a sharp eye was needed to be kept on the markets.
Tuesday then saw the Rand turn on its heels once again, as it punched up and above of R14.50/$...
Exporters, Importers, Investors and Business Owners alike were left 'cowering in the corner' as the Rand was predictably unpredictable, every step of the way!
With such volatility, it makes it so difficult for everyone, whether the movement is or is or not in favour.
Wednesday saw some slight relief for the Rand, as it moved down back under R14.35 levels, and began to strengthen further too as the day went on.
On Thursday morning, our next forecast was published, which showed we may be in for a bit of Rand weakness in the coming days - but it remained to be seen as there was a chance of short term strength first.
Click to enlargeThe Rand broke below support later on Thursday on the back of poor sales figures reported by retailers in the USA, and punched down right under R14.10/$ in double quick time, signalling an extended corrective pattern was still in play.
While the news over Gordhan has now slowed down a bit, it has certainly not left the markets in any calmer waters, with sharp moves in both direction.
We are seeing volatile, and very disconcerting moves ... and for anyone with forex exposures, this is not a time to take your eyes off the markets!
Thursday's strength did not last long, as we saw the Rand move back up to hit above R14.30 on Friday morning. The markets were volatile, and it was giving the whole of SA the jitters.
But the Rand had the last say for the week, as in afternoon trade it turned back on its head and was under R14.20/$ by the close of business!
We are in dangerous times - you can make a pile of money if you time it right...
....but you can also lose a pile of money if you time it wrong
The Week Ahead (19-23 August 2016) |
Violent, bouncy and distressing was par for the course this past week. But what is coming in the next week?
We are due for a few big economic events, and I would advise all those with access to our Rand Fundamental Events to not take an eye off of them. While these events are definitely not the life and soul of the markets, they can certainly be triggers for some drastic short term moves - a trader's dream...or nightmare!.
While bomb blasts go off in America, and the presidential race hots up, Zuma and Gordhan appear to be trying to show the public that there is no issues in their relationship...
...something has got to come of this ticking time bomb, and it is only a matter of time before we get an answer.
There is certainly enough to watch in South Africa, as well as on the global scale, without having to worry about your Forex Exposure and Rand fluctuations as well!
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To your success~
James Paynter
