South Africa 40 Cash Index price breakout confirms ahead of key data release
The SA40 Cash Index has broken resistance to suggest further gains, although the US rates decision and policy meeting are likely to be the catalysts for confirmation or failure thereof.
The South Africa 40 Cash Index, after finding support at the 200-day simple moving average (blue line) (200MA) and the 66400 level multiple times, has now started to rebound, and broken the 69240 level.
The black arrows mark the long lower wick candles and price rejection off the 66400 level. Yesterday’s (Tuesday 21 March) close above the 69240 level meets the breakout criteria previously guided for long entry. The suggestion now is that the short term move higher is now aligning with the longer-term uptrend still in play.
70700 becomes the initial upside resistance target from the move. A close above this level would suggest 72840 as a further upside resistance target. Traders who are long might consider using a close below the 68550 level as a stop loss indication for the trade.
Key data to look out for
Traders of the South Africa 40 Cash Index will however want to place close attention to upcoming data which does provide increased short-term risk to markets. Of particular importance will be the Federal Reserve Bank’s interest rate decision at 8pm on Wednesday the 22nd of March 2023. This will be closely followed by a press conference with Fed members at 8:30pm.
A calendar of upcoming events this week is as follows:
Date | Time | Region | Event | Forecast | Previous |
---|---|---|---|---|---|
22 March 2023 |
8:00pm |
USD |
FOMC Economic Projections |
|
|
22 March 2023 |
8:00pm |
USD |
FOMC Statement |
|
|
22 March 2023 |
8:00pm |
USD |
Federal Funds Rate |
5.00% |
4.75% |
22 March 2023 |
8:30pm |
USD |
FOMC Press Conference |
|
|
23 March 2023 |
2:00pm |
GBP |
MPC Official Bank Rate Votes |
7-0-2 |
7-0-2 |
23 March 2023 |
2:00pm |
GBP |
Monetary Policy Summary |
|
|
23 March 2023 |
2:00pm |
GBP |
Official Bank Rate |
4.25% |
4.00% |
23 March 2023 |
2:30pm |
USD |
Unemployment Claims |
198K |
192K |
24 March 2023 |
10:15am |
EUR |
French Flash Services PMI |
52.4 |
53.1 |
24 March 2023 |
10:30am |
EUR |
German Flash Manufacturing PMI |
47.1 |
46.3 |
24 March 2023 |
10:30am |
EUR |
German Flash Services PMI |
51 |
50.9 |
24 March 2023 |
11:30am |
GBP |
Flash Manufacturing PMI |
49.8 |
49.3 |
24 March 2023 |
11:30am |
GBP |
Flash Services PMI |
53.1 |
53.5 |
24 March 2023 |
3:45pm |
USD |
Flash Manufacturing PMI |
47 |
47.3 |
24 March 2023 |
3:45pm |
USD |
Flash Services PMI |
50.3 |
50.6 |
IG client sentiment
As of 3:30pm on the 22nd of March 2023, most IG clients (63%) with open positions on the South Africa 40 Cash Index expect the price to fall in the near term, while 37% of IG clients with open positions on the index expect the price to rise in the near term.
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