US Dollar (USD) yesterday fell broadly against the South African Rand (ZAR), dragging the USD/ZAR to 10.57, despite a surprise decline in the number of people claiming jobless incentives in the US; the pair is expected to test the channel support in the short-term before resuming the upside movement.
USD/ZAR is being traded near 10.59 at 11:25 GMT in London. Immediate resistance may be noted around 10.69 that is the 50% fib level ahead of the channel resistance which is currently sitting in near 10.90. A daily closing above the channel resistance could push the pair into stronger bullish trend, threatening the multi-year high around 11.86.
On the downside, the pair is likely to find support around 10.53 that is the 61.8% fib level ahead of the channel support which is currently near 10.38. A daily close below the channel is required for further dips below the 10.00 handle.
US Job Data
The number of people in the US, who claimed benefits for unemployment, declined to 311K during the week ended on March 21 as compared to an upwardly revised 321K reading in the week before, analysts had predicted an increase to 325K. Similarly, the total number of jobless claims declined to 2.823 million during the week ended on March 14 as compared to a downwardly revised 2.876 million reading in the week before, a report from the labor department revealed yesterday.
South Africa Trade Balance
On Monday, March 31, South African Revenue Service will release the trade balance figure for the previous month. According to forecast, the trade deficit narrowed down to ZAR 2.1 billion in February as compared to ZAR 17.06 billion in the month before. Better than expected actual outcome will be seen as bearish for USD/ZAR and vice versa.
On Wednesday, April 02, South Africa’s Bureau for Economic Research (BER) is scheduled to release the consumer confidence report for the first quarter of the ongoing year. According to median projection of different analysts, consumer confidence declined to 5.82 points in the aforementioned quarter as compared to 7.0 points decline in the quarter before.
The prolonged strike of workers in South Africa, demanding increase in the wage rate, has resulted into more than $1 billion loss to miners, according to the latest statistics from the government authorities. The strike is likely to have disastrous effects on the first quarter growth and trade balance. The African nation is one of the largest producers of precious metals.
Technically the pair might extend downside movement to test the channel support. Medium to long term bias however remains very bullish amid a wide range of challenges faced by the South African economy and steady growth in the US.
To contact the writer of this story: Usman Ahmed at email@example.com