Rand Review - 6 Feb 2017

After a barnstorming previous week, we expected nothing short of exactly that, once again for this past week...

And yes… our anticipation (more like worry), was not far wrong!

The Rand rushed from high to low, as the uncertainty continued to grow throughout the country - was the Rand EVER going to stabilize?

But on the other side of the coin, the Dollar, with President Trump at the fore, signing on average 2 executive orders per day, the USD market had it’s own problems to worry about!

So…

This week was packed with rumours and action - let’s get right into reviewing it!

Monday morning. And already, the Rand had left us in its dust!

The market, which actually opens at 23h00 SAST on Sunday night, had gotten a headstart on most of us!

Around 6am on Monday, the beginning of the move began, but slowly to start with…

...before it had gained too much speed, it was time for our forecast. And a critical forecast it turned out to be…

The outlook (shown below - click to enlarge) forecasted that we would be seeing a sharp weakening of the Rand in the next couple of days, sending the market sky-rocketing upward from its current mark of R13.4653...

Click to enlarge

...and wow, did the market move after we issued that!

In a mini-crash flash, the Rand had shunted along, and in no time was sitting over R13.68!

Thankfully our forecast had gone out just before this to give our subscribers some idea of what was coming… little did we all realize just how quickly we were to expect things to move!

The Rand topped out at that R13.68 mark, and began retracing its way back down again.

However, once again, it did not waste any time at all, and before the day was out it was back under R13.45 to the Dollar!

Phew...

What a day. And it was only Monday!

What more did the markets have in store for us with the remainder of the week?

So moving on to Tuesday…

...we saw the markets stabilize slightly for the first few hours of the day. The news of the morning was the rumours relating to the upcoming State of the Nation event on the 9th of February - talk of cabinet reshuffles and who know what all else were all over the news…

And just when they stability was returning, it all changed again! In anticipation of the SA Balance of Trade at 14h00, the market started moving viciously up and down.
This movement saw the market back over R13.60 to the Dollar.

And it turned again, sending it spiralling down from that high for the day…

On the back of an excellent trade surplus of R12.04 billion, the market cruised a whopping 25c in a couple of hours! Suddenly it was back at R13.35…

...but the market’s had their own agenda, and all too soon it had all reversed and was lost, with the market trading at R13.50 by the close of Tuesday…

Surely this week had to slow down? Just for our poor typing finger’s sakes!

On Wednesday, not a moment too early, it did finally slow down…

Perhaps it was the fact that the US Fed had kept interest rates on hold on Tuesday night that the markets could finally slow down.

However, when we speak of slowing down, we don’t mean that the market moved just 7 or 8 cents during the day…

That figure has virtually doubled in recent times, and the fact that the market had a high and low with a difference of just 15c or so during the day, was the quietest we had seen it all week!

The market steadily strengthened throughout the day, and by the time our forecast was up for viewing on Thursday morning, it had moved to a level of around R13.40 to the Dollar.

The forecast (see below - click to enlarge) showed that we should soon be bottoming out, and then from there, we can expect there to be Rand weakness. It seemed the earlier movement in the week had just been a jump slightly out of the trend, but it had not affected the overall expected trend.

Click to enlarge

For Thursday, the markets followed our forecast, but slowly…

It moved very gently down to R13.31, before retracing slightly in the evening toward R13.39…

Possibly this had been the bottoming out that we had been looking for and expecting, but we would have to wait for Friday to get confirmation.

And we got confirmation on Friday…

...but NOT quite the confirmation we were expecting!

During the course of the morning, the market weakened, sending it closer to the R13.50 mark…

And that was when it all changed… for the second time in the week, the rand completed another stunning crash-flash!

It dropped over 25c in a couple of hours, and was suddenly trading in the low R13.20s in the morning.

What had triggered this?

Once again, the same old event… USA Non-Farm Payrolls at 15:30. Without fail, it is the biggest trigger for the USDZAR all year round.

With our Rand Fundamentals & Events, we track all these events and give the details to a premium subscribers - let us know if you are interested in gaining access to them.

While we would love to be predicting a week of peace and tranquility, it is difficult to do that!

After another week in the tumbledryer, there could be almost anything around the corner.

We have a big week in terms of events, both politcal and economical which are soon due in South Africa and the States, which could have significant effects on the markets.

We are going to have to watch those ones closely…

...such as the SONA (State of the Nation Address) on Friday.

This one is always a biggie, because with talks of cabinet reshuffles and more, the chances are it is going to turn into the customary shambles which it generally does…

So, it is difficult to give you, Alex, too much insight into the next week. It is the dark horse as always, with lots of unknowns and variables.

But…

…as always, our forecasts will be going out on Monday and Thursday of this next week, giving our subscribers the way forward for the coming week, using the trusty Elliottwave Principle to create accurate forecasts.

If you would like to join them, test out one of our Free Trials by clicking the button below:

As always, I would love to hear your comments and feedback - please leave a comment below.

To your success~

James Paynter