Rand Dollar Price Action:

  • South Africa enters into level 4 lockdown restrictions, business confidence falls
  • USD/ZAR Volatility remains heightened in anticipation of NFP’s
  • Visit the DailyFX Educational Center to discover why news events are Key to Forex Fundamental Analysis
Advertisement

South Africa has entered into Level 4 lockdown in an attempt to curb the spread of the new Delta variant that continues to spread panic across the nation. Although USD/ZAR price action has remained on a downward trajectory (YTD) against the US Dollar, the combination of fear and uncertainty is expected to weigh on the volatile Rand, as hopes of a swift economic recovery falter.

USD/ZAR Forecast: Rand Donates Recent Gains as SA Enters Level 4 Lockdown

Source: Refinitiv

USD/ZAR Technical Analysis

A shift in risk sentiment has provided USD/ZAR bulls the opportunity to regain control over the short-term systemic trend, pushing prices into a level of resistance, formed by the 38.2% Fibonacci retracement level of the March – June move at 14.23. Although the downward trajectory persists for now, prices remain above both the 20 and 50-Day Moving Average while the Standard Deviation (a measure of volatility) remains heightened.

USD/ZAR Daily Chart

USD/ZAR Forecast: Rand Donates Recent Gains as SA Enters Level 4 Lockdown

Chart prepared by Tammy Da Costa using IG

Non-Farm Payrolls Takes Center Stage

With global inflationary concerns gaining traction, this Friday’s release of Non-Farm Payrolls has the potential to catalyze price action further, if Non-Farm Payrolls places further pressure for tapering.

USD/ZAR Forecast: Rand Donates Recent Gains as SA Enters Level 4 Lockdown

Source: Refinitiv

— Written by Tammy Da Costa, Analyst for DailyFX.com

Contact and follow Tammy on Twitter: @Tams707

https://www.dailyfx.com/usd?ref-author=dacosta

Source

Share this now: