SA Rand heading for light support levels
Whilst everyone else has been looking at events in Europe, what with the goings-on in Westminster, Germany on the brink of recession and French police re-enacting Waterloo using their citizens as live targets, little attention is being paid to the minor currencies. Looking at the SA Rand (USDZAR), it is clear that the market is in a downtrend. What is less clear is exactly why there should be a demand for the SA currency at all. Whilst there has been a rise in GDP at the end of 2018, the political situation can hardly be ignored, in particular the treatment of white farmers. South African politicians do not appear to have learned any lessons from Zimbabwe, a country that went from being the “bread basket of Africa’ to hyperinflation and ruin. With USDZAR currently trading around 13.70 we’d expect light support around 13.53, but would ultimately expect to see a test of 13.00, where support should be a little more robust. We’d advise short position holders to keep a Stop Loss in place and bring it down as the decline progresses to extract maximum value.