Getting ready for the South African Reserve Bank meeting
Technical Analysis Summary USD/ZAR: Buy
| Indicator | Value | Signal |
| RSI | Buy | |
| MACD | Buy | |
| MA(200) | Neutral | |
| Fractals | Neutral | |
| Parabolic SAR | Buy | |
| Bollinger Bands | Neutral |
Chart Analysis
On the daily timeframe, USDZAR: D1 has broken up the downtrend resistance line and the 200-day moving average line. A number of technical analysis indicators formed signals for further growth. We do not rule out a bullish movement if USDZAR: D1 rises above the latest up fractal and the upper Bollinger band: 17.4. This level can be used as an entry point. Initial risk cap possible below Parabolic signal, latest down fractal, lower Bollinger band and 200-day moving average line: 16.5. After opening a pending order, we move the stop following the Bollinger and Parabolic signals to the next fractal low. Thus, we change the potential profit/loss ratio in our favor. The most cautious traders, after making a trade, can switch to a four-hour chart and set a stop loss, moving it in the direction of movement. If the price overcomes the stop level (16.5) without activating the order (17.4), it is recommended to delete the order: there are internal changes in the market that were not taken into account.
Fundamental Analysis of -
The South African Reserve Bank Interest Rate Decision will take place on January 26, 2023. Will USDZAR quotes go up?
The current South African Reserve Bank (SARB) rate is 7%. Market participants do not exclude its increase to 7.5%. If this does not happen, then the rate of the South African rand may weaken. In addition, the expected statement of the SARB regarding its monetary policy in the current year may affect the dynamics of the rand. Recall that South African inflation in December 2022 fell to 7.2% y/y from 7.4% y/y in November. The maximum increase in consumer prices was observed in July 2022 and amounted to 7.8% y/y. SARB inflation target range is 3-6%.