A fair week for the Rand - it gained some ground, and jumped some hurdles.
When one takes a look at the line-up of events that passed over the previous week, it is a great surprise that the market was not more volatile.
Is the Rand reaching a point of stability, with everything hunky dory?
Well...that might be going a bit too far. But the past two weeks have certainly helped us gather just a little bit of normality back into the Rand.
While stability does not give us a lot to write about, it is certainly comforting to the general public!
Let's review how the week played out...
How It Happened (21-25 Nov 2016) |
Monday morning began with the Rand trading at the mid 14.40s... it looked as if it was just going to be a quiet day, and that we would not see too much action.
There were a number of big events lined up for the remainder of the week, but for now things were looking fairly quiet.
Our forecast arrived before 9am, and it showed the picture for the next few days. It initially said that we were expected to see some downside in the next couple of days, before the Rand would weaken again. It was expected that the Rand would go to at least 14.25 or lower.
Click to enlargeAnd then almost as our forecast went out, things started to happen...
The Rand began strengthening at a fantastic rate, and most of the day followed in that same vein.
In leaps and bounds the Rand had already strengthened all of about 20c by mid morning, and was showing signs of going further.
It validated our forecast much faster than expected, and by mid afternoon, the Rand was trading at 14.16, a full 30c from where it had been early on Monday morning!
So this gave something to cheer about as we headed into the new week, and although the market consolidated a bit and retraced slightly, shortly after making that low.
As we headed into Tuesday, the Rand as trading at 14.20, leaving it at least 20c up on its start on Monday morning. So more downside was possible...
...and so it happened...
The Rand pin-dropped again during the morning, sending it ever so close to R14/$, making a low of R14.01. This once again just highlights the power of the Elliott Wave Principle, as their was seemingly no reason for this move, and yet the Rand had strengthened nearing on 45c in just 2 days!
But as per our forecast, the market was expected to turn after it had made that low, and the expected trend for the coming day or two, was for the Rand to begin weakening.
And so it did, as the level of R14.01 was not broken again throughout the week.
The Rand consolidated, and pretty much leveled out to track sideways for the remainder of Tuesday and some of Wednesday.
And from mid morning on Wednesday, the trend started to look against the Rand, as it moved over 14.25 in the mid afternoon...
...this may have had something to do with the slew of events that went off at 10am SAST - SA Inflation Rate, US Durable Goods Orders & FOMC Minutes.
All these events are ones to watch, but not the most dangerous ones that we get.
By the time Thursday dawned, the Rand had done a bit of back tracking and had reached a short plateau at R14.20... Things from here were looking pretty interesting for the coming few days.
Our forecast was due on Thursday, and we sent it off to our subscribers as soon as we possibly could... This forecast was an important one which showed quite an interesting outlook for the coming few days.
Undecided markets...
Friday... Black Friday to be exact ... ended up bringing more of the same jerky movement, with the pathway still a bit unclear for the day. In mid morning, there was a surprise spike down which sent us down to 14.03...
...but before you could blink, it was back over R14.20/$ again!
Not big enough moves to cause too much trouble, but certainly a bit unsettling.
And then some big news then hit late on Friday...
BUT...
...had kept their investment rating just above #JunkStatus.
And Moody's also decided to keep their rating just into investment status.
Ever so close, but that said, we are not out the woods yet, with the largest of the three Standard and Poors still to give their verdict...
But on the back of this news, the Rand actually strengthened, ending the day around R14.10/$, as another week drew to a close...
The Week Ahead (28-2 Nov/Dec 2016) |
This week is a biggie...
We get the end of November, with the first few days of December paving the way to the year end. But the end of the year is still a long way away, due the hurdles that lie before us before then.
Just a thought back to December 2015 makes us remember not to think that the end of the year will just end quietly...
...but besides that, we have 2 big events events coming up.
It is that time again...
As already mentioned, we still await S&P's credit rating update...
Will we be given another 6 months reprieve from #JunkStatus which would be disastrous. On top of that, we have some big economic events upcoming...
So...a lot upcoming in the next few days. Don't take your eye of the action.
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James Paynter
