BRICS currencies movement for the week – 24 January 2020

Solid week for the ZAR (Rand), improving against the USD during a week where all BRIC currencies, as well as the Euro, weakened against the USD.

#BRICS currency/USD movements for this week:

Brazil -0.5%
Russia -0.8%
India -0.4%
China -1.1%
South Africa +0.4%

Euro/USD -0.6%

Technically, the Rand (ZAR) traded in the bands as expected this week, remaining below the longer-term Symmetrical Triangle. It did however manage to break below the short-term Rising Wedge which now bring the R14.15 levels back into play.

It is still trading below both the 50-day and 200-day moving averages (EMA) and manage to also break below the 8-day EMA this week. A break and close below the 21-day EMA (R14.36), could see the ZAR strengthen even further. All four the EMA’s (8, 21, 50 & 200 day) are pointing downward now, with the 50-day EMA still trading below the 200-day EMA, which is a clear indication that the trend is becoming quite healthy.

Should weakness return for the ZAR, could see the currency test the Symmetrical Triangle (at R14.50), which also coincide with the 200-day moving average at R14.51. A break and close above these levels, could most probably test the top of Symmetrical Triangle at R14.85, with R15 being an extreme and vital resistance level. Any traders should still watch this level VERY closely.

Should the ZAR however continue its relative improvement this coming week, could see it moving closer to the R14.15 levels, which is currently a very strong support level.

I still maintain my longer-term (positive) stance on the Rand, with a medium-term target of R13.85. Most likely trading band this week are being between R14.15 and R14.50.