The DXY let off some steam following yesterday's relatively upbeat US GDP data for Q2 which opened the window for some ZAR strength. The DXY's recent rally saw the greenback gain roughly 4.4% from the past 10 days but the yearly high of 109.27 remains intact for now.
All the focus will however be on Powell's Jackson hole speech later today and markets may have to brace for a hawkano.
The first support rate on the pair sits on the 23.6% Fibo retracement rate at 16.57 and the 50-day MA rate of 16.60. A failed break below this zone could signal more ZAR weakness. A move higher towards the yearly high of 17.31 is on the cards if the pair climbs back above the massively critical 61.8% Fibo retracement rate from the rand's covid recovery at 16.82 (I'll zoom out and post a pic in the comments for perspective). A break above 17.31 could see the rand stumble towards 18.00-18.10.
Best case scenario for the rand is less hawkish Powell mumble which will allow the rand to hold the pair below the 50-day MA support rate. A break below the 50-day MA will allow for a retest of the support zone between 16.14 and 16.32.
In terms of technicals the RSI is sitting well below overbought levels and there is a golden cross (50-day MA > 200-day MA) in play which does not put the ball in the rand's court.
All the focus will however be on Powell's Jackson hole speech later today and markets may have to brace for a hawkano.
The first support rate on the pair sits on the 23.6% Fibo retracement rate at 16.57 and the 50-day MA rate of 16.60. A failed break below this zone could signal more ZAR weakness. A move higher towards the yearly high of 17.31 is on the cards if the pair climbs back above the massively critical 61.8% Fibo retracement rate from the rand's covid recovery at 16.82 (I'll zoom out and post a pic in the comments for perspective). A break above 17.31 could see the rand stumble towards 18.00-18.10.
Best case scenario for the rand is less hawkish Powell mumble which will allow the rand to hold the pair below the 50-day MA support rate. A break below the 50-day MA will allow for a retest of the support zone between 16.14 and 16.32.
In terms of technicals the RSI is sitting well below overbought levels and there is a golden cross (50-day MA > 200-day MA) in play which does not put the ball in the rand's court.
