Rand price forecasts: USD/ZAR, EUR/ZAR and GBP/ZAR
The ZAR price while consolidating in the near term remains in a long-term trend of depreciation against the USD, EUR and GBP
USD/ZAR
The long-term trend for the USD/ZAR remains up, although in the short to medium term the price trades within a broad sideways consolidation between levels 17.70 and 18.70.
The longer-term uptrend still suggests keeping a long bias to trades.
Trend followers might prefer to see the near term move lower for the currency pair ending with a bullish price (candlestick) reversal around either the 18.00 or 17.70 support levels for long entry. In this scenario, 18.40 becomes the initial upside resistance target favoured from the move, while a close below the reversal low might be used as a stop loss indication for the trade.
EUR/ZAR
The long-term trend for the EUR/ZAR remains up as indicated by the trading channel on the daily chart above. In the short term we see the price consolidation between the 19.80 and 20.00 levels.
The longer-term uptrend suggests keeping a long bias to trades on the currency pair.
For long entry, trend followers might prefer to see the price breaking resistance (with a close above), before targeting a move towards the 20.25 level and possibly channel resistance at 20.50. In this scenario, a close below the 19.80 level might be used as a stop loss indication for the trade.
Alternatively, should a downside break of the 19.80 support level instead manifest, trend followers might hope to rather see a bullish price (candlestick) reversal before channel support at 19.50 for long entry. In this scenario a close below the reversal low might be used as a stop loss indication for the trade.
Only on a price move below the major low at 19.20 would we reassess our long only bias to trades on the EUR/ZAR currency pair.
GBP/ZAR
The long-term trend for the GBP/ZAR remains up as indicated by the trading channel on the daily chart above. In the short term we see the price consolidation between the 22.40 and 22.65 levels.
The longer-term uptrend suggests keeping a long bias to trades on the currency pair.
For long entry, trend followers might prefer to see the price breaking resistance (with a close above) of the 22.65 level, before targeting a move towards the 23.00 level, and possibly channel resistance at 23.30. In this scenario, a close below the 22.40 level might be used as a stop loss indication for the trade.
Alternatively, should a downside break of the 22.40 support level instead manifest, trend followers might hope to rather see a bullish price (candlestick) reversal before channel support at 22.15 for long entry. In this scenario a close below the reversal low might be used as a stop loss indication for the trade.
Only on a price move below the major low at 21.85 would we reassess our long only bias to trades on the GBP/ZAR currency pair.
This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
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