ZAR Crashes ... were YOU ready for it?

All good things come to an end, right?

That was the story of this week as the weight of all the negative news and economic events took its toll on the Rand, crashing it as high as R13.26...

So now, with the Rand making its worst level for the month, it seems the tables have turned...

...and the Rand is now on the backfoot.

Let 's take a look at how it played out, and how you could have been ready for this to happen

(it it actually would not have been as difficult expect...)

Friday's forecast painted a sorry picture for the Rand. It looked like we were in for bad weather, and a move back above R13 with 13.1257 being key to further advances...

Click to enlarge

And what followed was extremely close to our predictions, helped along with a few news-worthing bumps along the way...

The events of note from this past week were:

• Hurricane Irma Destruction - Florida and the Caribbean is left in an absolute shambles as Hurricane Irma takes the stuffing out of a huge area over the weekend
• SA Current Account Deficit Q2 - despite predictions of a decrease to 1.7% of the GDP, it widened even further to 2.4%...
• Reserve Bank vs Public Protector - the battle rages on, as it now comes out that the Public Protector has met with the presidency to discuss amending SARB's mandate...
• SARS misses revenue target - an awful quarter for SARS as they shortfall by well over R10bn in tax collection.
• KZN Political Court Ruling on the ANC - KZN Court gets the ANC on the run with a ruling that the ANC’s 2015 provincial elections were ‘deeply flawed’
• ECB Interest Rate Rate Decision - often a trigger for major moves...

Monday had positive vibes about it, with the Rand trading smoothly, well under R13/$ - only our forecasts warned of the coming peril...

Expectations were for SA 's Current Account Deficit for Q2 to come out at a vastly improved. For Monday itself, the markets were pretty quiet, with a small range of around 10c taking us into Tuesday still below R13 to the Dollar.

Thoughts were that the US being in such turmoil after 2 killer hurricanes was helping to keep the ZAR strong....

Tuesday offered a wider range of events, and some action from the Rand.

The Reserve Bank vs The Public Protector was back in the headlines - now with the latest news being the bank indicates that Public Protector Busisiwe Mkhwebane had met with the Presidency to amend the Reserve Bank’s mandate...

This is a ticking time bomb, waiting to explode...just a bit more volatility for the markets.

More speculation was around from companies like Currencies Direct, querying why we have not seen stronger Rand gains: "Are we in for another cabinet reshuffle (Dlamini-Zuma to be parachuted into a Ministerial post?)."

AND on top of it all, SARS missed revenue target for the first quarter of 2017 by a huge R13.1bn, and are on track for a R50bn miss by year end...what are they going to conjour up now to collect more tax?

On the back of this all the market actually strengthened as far as R12.87/$ during the morning...

...but the afternoon was a different story, as we saw the Rand push over R13 to the Dollar.

Heavy pressures were weighing on the South African economy, that was for sure.

Across the ocean, America 'got lucky' with Hurricane Irma as a distance of twenty miles from her expected path of destruction, as total estimated cost was around $50bn, down from some original expectations of around $200bn...

...but the hurricane season is not over yet, as sea temperatures remain high.

And locally, temperatures also remain high...

News came out that the ANC KZN leadershiphas being thrown into a whole heap of trouble, with KZN court ruling that ANC 2015 provincial elections were deeply flawed. With the KZN being the most influential branch in view of their December elections, this could have big implications...

And then, Johann Rupert, the richest man in South Africa and probably one of the most well known names in the country had come out all guns blazing on Tuesday, by saying "Radical Economic Transformation just a code word for theft", as reported by Fin24.com (...yes, communism is theft!)

And with violent riots breaking out (once again) in Hout Bay, there was a lot of negative news running against the market, and it was taking its toll.

It was a rough day for the market - from sitting pretty at R12.98 to start the day, it ended over R13.15/$ - already over 25c from where we started the week.

It touched as high as R13.18/$ on Wednesday, which meant that our forecast from Friday had been validated perfectly.

Now it was time for our next one. It looked as if more weakness was on the horizon for the market, with the expected trend being up further into the 13.27-13.44 area...

Click to enlarge

Late on Wednesday, the news landed that the government has suspended the implementation of the Mining Charter which required local mines to be 30% black-owned - a welcome relief for the industry...

Our rating agency friends Moody’s sent another warning to Team SA, stating that another downgrade by April is likely if there are no 'structural changes' in SA.

Thursday had one of the big events of the week - the ECB Interest Rate Decision.

And when it did finally come, we had some action from it as the market spiked to touch just below R13.27!

It then recovered and when Friday rolled around, we were back at R13.12/$...

And then Friday was when it all happened -

• KMPG Executives were implicated in a whole new scandal with the Guptas
• North Korea fired another missile over Japan
• There was a bomb blast in the underground in England, prompting Trump to say once again that his travel ban must be reinstated and expanded (maybe this time they will listen to his reasoning...?)

The market was pretty choppy as a result of all this, but leveled out to close the week at R13.16...

So, quite some week last week! What will this one throw at us?

Well, with both SARB and US Fed interest rate decisions this week, the next few days are not likely to be any less volatile.

Based on our analysis, the initial outlook is for more Rand weakness, but we are watching key levels the next couple of days, as this will give a clearer picture for the next couple of months.

Last week, our clients were able to switch off the news and just trust what the charts were saying...enabling them to take action at the right time.

Question is: Did YOU taken action in time, or were you caught once again?

This is not a time to be flying blind, or going by gut feel, that's for sure!

If you are being negatively affected by the volatile Rand, let me help by giving you a roadmap of likely movements ahead, based on our sentiment pattern analysis....GRATIS.

Look forward to helping succeed~

Kind regards,

James Paynter