Rand Review - 6 Mar 2017

A week which was neither here nor there...

...but more than enough see-saw activity to provide some headaches for those with a forex exposure.

With positivity still booming, many were hoping for the Rand to rush to greater strength, further below its records for the year...

...such was not the case, as we saw the market take a bounce back over R13/$.

It was not an easy week for the Rand.

It felt as if it had a lot running against it:

• Trump and his failure to come up with a tax plan
• Malema and his terrifying ideas
• General political unrest surrounding it - such as the Hawks investigation of the deputy finance minister

But there was enough which happened to make it interesting, and we intend to review it...

Interested?

Read on...

So when Monday dawned, the Rand was sitting pretty from the previous week.

It had been a humdinger and a half, but the Rand had blitzed through to close on Friday below R13 to the Dollar, something we have had the pleasure of seeing very seldom.

But now it was Monday.

And there was a lot happening during the week: a flood of US Data being released, including US GDP & US Fed members speeches, and of course, the SA Trade balance.

We were beginning the week with our forecast (see below - click to enlarge) which showed us what the expect out of the first half of the week.

It gave us an outlook which which showed that Rand weakness could be expected with 13.19 being a pivotal level.

Click to enlarge

Some news to keep in mind during the week was the Hawks now investigating Deputy Finance Minister, Mcebisi Jonas on SAA corruption charges...

This seemingly confirmed the Hawks strategy, which was rather like a machine gun - spraying bullets in the general direction of their targets, waiting for one to strike home.
It was only a matter of time...

But back to the Rand.

Monday was rather a choppy day of market activity, with a low of R12.86 for the day, and a high of R13.03, closing at R13.02.

Tuesday was different.

With Trade Balance, US GDP & Trump's speech in the evening, there was more than likely going to be some more definitive movement today.

And so there was.

After the market had made it's best level for the day in the early morning of R12.95, it was one way traffic.

Throughout the morning, afternoon and evening, the Rand climbed steadily.

In the midst of it all, Julius Malema sent shockwaves through South Africa with the statement: "If you see a beautiful piece of land, take it"...

That combined with the probability of a March US interest rate hike jumped to 80% and worse than expected SA Trade Balance deficit (R10.81 billion) did not have a good effect...
And the Rand blasted onwards.

It broke through the R13.08 mark to validate our forecast as accurate, and kept on heading upward.

By the close of the day, it had hit a high of R13.13...

...had the tide turned?

Apparently not.

On Wednesday, from the dawn of the day, the Rand touched a bit higher at R13.15, but then the tide went right back the other way...

...and by midday the Rand had dropped 10c from its lofty perch!

And while the market did retrace most of that in the early afternoon, the trend of the morning resumed throughout the evening, as the Rand rushed downards, below R12.96/$!

Wow.

The week had been nothing short of a see-saw so far, and there was more to go.

The market bottomed out at that point, and began retracing...

And then it was Thursday: our forecast day.

This was a crucial forecast after such an undecided week, but now we were looking to see if some clarity was going to come in the last part of the week.

Unfortunately, this forecast is still being played out and is not available to the public - Click here to view it

And basically from the start of Thursday, the Rand began tanking...

Consistently, throughout the day, it pushed upwards, and eventually reaching its peak at R13.18/$...

And suddenly, it was Friday...

The markets started the day still perched above R13.15/$, but the Rand had plans for the day.
From the outset, it began strengthening.

And despite some volatile spikes during the course of the day, it kept pushing onwards, strengthening.

However, the biggest moves of the day came after South African business hours...

The Rand pin dropped over 10c in a couple of hours, and suddenly was hot on the heals of R13/$!
What a strange week of undecided movement...

...and at that, the week drew to a close!

The coming week is jam packed with economic events, ranging across multiple different currencies.
On top of that, Trump and his administration are again in the headlines, and again for the wrong reasons...(according to the media anyway)

To make matters worse, Malema's suggestions of a coalition between the ANC & EFF is a terrifying prospect for most - it would be out of the frying pan and into the fire in terms of political turmoil.

So... lots of talking points.

But more importantly...

The Rand is at a critical level.

As it hovers around the R13/$ mark, all eyes are watching it.

Is it the end of the road, or are we seeing the start of another positive Rand year despite negative news?

It is hard to answer this - there is a lot of time left in this year.
But...

We do already have a forecast which covers the next few weeks, months and years, which our premium and valued clients have access to.

It is amazing how the Elliott Wave Principle can encapsulate all this into a few simples chart...

If you want to see it, just click the button below:

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

To your success~

James Paynter