BRICS currencies movement for the week – 20 December 2019

Another great week for the Rand, pretty much doing exactly what was expected. Not only did it strengthen against the USD, but also outperformed all BRIC currencies quite handsomely this week. It is now also officially stronger against the USD for 2019 and with less than 2 weeks to go, could just be the first positive sign in years for the South African currency.

#BRICS currency/USD movements for this week:

Brazil +0.1
Russia +1.0%
India -0.4%
China -0.2%
South Africa +2.1%

Euro/USD -0.4%

Technically, the Rand broke an ANOTHER important support level this week, closing the week below the longer-term Symmetrical Triangle support line, which started in the beginning of 2019. The Rand/USD is still trading below both the 50-day and 200-day moving averages, which are both now starting to point downward (the MA). This makes the trend definitely look a lot healthier.

Although it came very close to my R14.15 support level, it still could not breach this level and with the RSI finding itself now close to extreme oversold (overbought Rand), could see the Rand taking a bit of a breather around current levels.

Should this be a false break, with a break back into the Symmetrical Triangle, could see the Rand seeking resistance back at R14.50 with the 200-day moving average (R14.59) being next stop. A break and close above these levels, could most probably test the 50-day moving average (R14.70), with the top of Symmetrical Triangle at R15 being a very strong and important resistance level. Any traders should watch this level VERY closely.

The 50-day moving average is still getting closer and closer to breaking point. It is not only downward sloping (as mentioned a positive signal for the Rand) but edging ever closer to the 200-day moving average. A “Death Cross” (Golden Cross if you’re looking from a Rand or ZARUSD point of views), could see the Rand’s outlook for 2020 being a lot more positive.

My call for this coming week – I still maintain my longer-term (positive) stance on the Rand. It also still seems like it want to go and test the medium-term target of R13.85, but being somewhat oversold, could see us take a breather (sideways) this coming week. The trend is still very much our friend and do I therefore remain neutral for this coming week.

MERRY CHRISTMAS TO ALL MY RAND FOLLOWING FRIENDS!