The USD crushes the South African Rand
Keep in mind that the next day could be very volatile, so patience will probably go a long way.
The US Dollar traded back and forth against the South African Rand on Tuesday as we sit just below the 200-day EMA. It is an indicator that many people pay close attention to and use to define the general trend.
Looking at this chart, you can see that we have been bouncing between the R15 level and the R15.50 level for a while now, and I think only when we break out of this zone will we have the ability to move a significant amount of money in this market. The 15 rand level is an area that many people will pay particular attention to due to the fact that it is a large, round and psychologically significant number, and we are potentially forming a bit of a “double bottom” in this moment.
If the market fell below the R15 level, it is likely that the market will turn towards the R14.50 level. On the upside, if we break above the 200-day EMA, there is a chance that we will retrace back to the top of the range at the R15.50 level. If we can break above there, then the market is likely to go towards the 16 rand level.
Keep in mind that there are many questions about the direction of global growth, and of course we have the Federal Reserve meeting during the Tuesday and Wednesday sessions which will be a major influence on our next direction. After all, the rise in interest rates is already known, but markets will start to wonder whether or not the statement will be hawkish or dovish after that. The question is whether or not the war in Ukraine gave the Federal Reserve enough hedging to dampen it down a bit. By the end of the day on Wednesday, we should have a little more clarity. The next day or two could be a little choppy, but once we break out of the range we are currently in, it could bring more money into the market to shake things up. Keep in mind that the next day could be very volatile, so patience will probably go a long way.