Another week.
Another whirlwind week.
Once again, the Rand’s movements were anything but normal.
But then, maybe this is the 'new normal' after the past 2 years?
Scary thought!
As the Rand bounced from pillar to post this week, many were left wondering where we would actually end up on Friday afternoon.
And somehow, once again… it seemed as if the Rand’s movements would all come to virtually nought at the end of another volatile week. So often this happens, that a volatile week ends with almost the same rate as it began with.
But that does not mean that nothing important happened this week…
...let’s review it to get the bigger picture…
How It Happened (16-20 Jan 2017) |
As the market opened after the weekend, we saw the Rand trading around R13.50 to the Dollar… a fair rate, but anything could happen from there.
It was Monday - so time for our scheduled forecast update. We had a feeling that there was quite a week ahead with inaugurations and other economic events due, but were waiting to see what the wave count told us.
The forecast (see below - click to enlarge) showed us the market trading in the mid 13.50s and the expected trend to be a significant Rand strengthening in the next few days, as long as the market never closed above 13.6568.
The chart showed it heading down towards support at R13.1685… and so we waited with baited breath to see if it was right...
Click to enlarge...and at first, it looked completely wrong!
The market reversed on us, pushing higher and higher throughout Monday!
In no time at all, it was over R13.60 to the Dollar, and then it kept going, up and over R13.70 later in the day!
This was not what we expected…
...but then the market turned again on Monday evening, after it had reached its highest level of R13.71!
Throughout the early hours of Tuesday morning, the Rand started to turned things around.
And nd by the time business opened on Tuesday, it was back trading at R13.55/$.
Nor did it stop there.
It was soon under R13.50. And then R13.45.
In just a few hours, the Rand had moved the market a full 30c, down to R13.41!
But it was unable to break below that support level, bouncing up 10c before strengthening again before the end of the day.
Wednesday morning.
The market was now placed around R13.50/$ and with the strong reversal we had seen on Tuesday, the wave count still was for more Rand strength.
...but the market still had a few tricks up its sleeve!
Wednesday was a complete see-saw from beginning to end, as the market could not decide which way it wanted to go. Up 10c, down 10c, and then back up another 15c in the space of a little over a day!
The Rand’s hefty gains over the past few months have confounded many and and recent moves have proved once again that the South African currency is one of the world’s most volatile – and unpredictable.
Not a game to be in unless you have some objective view and strategy!
3 Volatile Days
So when Thursday finally arrived, there was little hope that there would be any calm in the markets, judging by the way things had gone in recent days…
It was also time for our next forecast which we completed and sent out to our subscribers. This forecast is still being played out as I type this, and so it is exclusively available to our subscribers…
The market was slightly less volatile but contined its erratic nature, hitting a high of 13.67 near the close before reversing sharply once again...
...and so the focus turned to Friday.
Friday was the big day. Inauguration day.
While USA political events can have a big effect on the markets, they also can have little to no effect. So everyone was watching and waiting to see what came of the day…
...and what the result of Trump's inauguration would bring for the markets.
The markets were sitting at a fair R13.55 when the day began, but they did not stay there for long…!
Around mid-day, the market had broken over R13.60… and then it all turned again, for the umpteenth time this week!
In an hour, it was back down 10c, with momentum seeming to be gaining…
...before reversing once more.
The Rand was playing cat and mouse, but finally ended out the day around R13.60 to the Dollar...
Looking back on the week, it was one of erratic sentiment and indecision, with the not much net result, the Rand closing not too far off where it opened.
The Week Ahead (23-27 Jan 2017) |
The week ahead is a bit of an unknown…
South Africa has gone quiet on the political front, but that often indicates there is a storm brewing just around the corner.
On the other side of the coin, America has a lot happening with a going out of the old and the coming in of the new with President Trump and his administration…
There is certainly going to be action around the corner there, and it will be interesting to see what effect it has on the Dollar, and indeed the global markets as well.
In terms of economic events, there are plenty coming up too.
So although the week is slightly unknown in terms of what is coming, there is certainly going to be no lack of things happening!
So, do you have a roadmap?
If not, you should probably think again, because 2017 is not likely to be any less volatile than last year…and possibly more so...
...and that is where our forecasts can help you. A roadmap for the way ahead, in a small, simple, readable, understandable and accurate format.
On top of that, we have a whole lot more features to offer you.
Why not give it a try today?
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To your success~
James Paynter
