The Johannesburg Stock Exchange (JSE) index rose by about 0.9%, closing at 85,275. This marked the fifth consecutive day of gains, contrasting with other global markets’ declines.
The increase was led by sectors like retailers, financials, industrials, and resource-linked companies, largely due to higher crude oil and iron ore prices. Furthermore, optimism surrounding tech giant Nvidia’s quarterly results, expected later that day, helped ease worries about escalating tensions between Russia and Ukraine.
South Africa Sees Inflation Drop to Record Low
In South Africa, inflation continued to drop, reaching 2.8% in October—the lowest since June 2020 and below the forecasted 3.1%. This decline strengthened expectations that the South African Reserve Bank might cut interest rates on Thursday.
Additionally, business confidence in the country climbed to its highest level since the first quarter of 2022. On the downside, retail sales growth slowed to a five-month low in September.
USDZAR Technical Analysis
The American currency trades bullish against the South African Rand at approximately 18.10, above the 50-period simple moving average. As of this writing, the USD/ZAR bulls are testing the 18.19 mark as resistance, backed by the 23.6% Fibonacci level.
As for the technical indicators, the Awesome Oscillator bars are green, nearing zero from below, meaning the bull market strengthens. Additionally, the Stochastic and RSI records show 67 and 52 in the description, respectively, meaning USD/ZAR is not overbought.
Overall, the technical indicators suggest the primary trend is bullish and should resume.
USDZAR Price Forecast
The immediate resistance is 18.19, slightly above the 23.6% Fibonacci level. From a technical perspective, the uptrend will likely resume if USD/ZAR stabilizes above the resistance. In this scenario, the next bullish target could be revisiting the November 14 high at 18.4.
- Good reads: USDCAD Drops from 2020 High on Oversold Signals
Please note that the bullish strategy should be invalidated if USD/ZAR prices dip below the 38.2% Fibonacci at 17.96. If this scenario unfolds, the downtrend that began from 18.4 could extend to 17.83, a robust supply area backed by the 100-period SMA.
USDZAR Support and Resistance Levels
Traders and investors should closely monitor the key levels below to make informed decisions and adjust their strategies accordingly as market conditions shift.
- Support: 17.96 / 17.83
- Resistance: 18.19 / 18.4
J.J Edwards is a finance expert with 15+ years in forex, hedge funds, trading systems, and market analysis.
