GBP/ZAR

The Rand has plunged against major currencies during the past week after South African President Jacob Zuma fired the country’s respected Finance minister Pravin Gordhan, what are the charts saying about the current decline in the South African currency?

The South African Rand has weakened substantially after the news that the Finance Minister Pravin Gordhan had been sacked by Jacob Zuma during a cabinet reshuffle.

 There are signs the GBP/ZAR down-trend is getting a bit long in the tooth.

GBP/ZAR has been falling steadily for months, reaching yearly lows of 15.56 last Thursday after the Bank of England’s (BOE) hawkish (meaning wanting higher interest rates) rate meeting.

With no major signs of the downtrend ending yet, we forecast GBP/ZAR to continue lower, with a break below the 15.7500 confirming a continuation down to 15.5000.

GBP/ZAR has now surpassed the 2016 October lows forged when hard Brexit fears were at their worst after Theresa May’s speech at the Conservative party conference.

The South African Rand has gradually strengthened versus the Pound after the outlook for emerging market currencies brightened.

A triangle pattern has formed on GBP/ZAR with bearish connotations.

The GBP/ZAR pair has broken above a key multi-month trendline signalling the balance of probabilities now favour more upside, with 17.50 providing an initial target but the potential for much higher rates thereafter, in the medium term.

 The outlook for the South African Rand has undergone something of a transformation according to a recent note by Deutsche Bank’s Gautam Kalani.

Price charts are indicating more upside for GBP/ZAR.

GBP/ZAR gapped down on Monday and then reversed and surged higher after Theresa May’s Brexit speech encouraged Sterling bulls.

Analysts at HSBC see the Rand as likely to have a year of two halves.

The Pound to Rand exchange rate (GBP/ZAR) is falling towards its three-year lows as the long-term downtrend takes over and starts driving the exchange rate down again.

Trump-inspired global reflationary hopes responsible for Rand recovery but technicals point to weakness on the horizon.

The GBP/ZAR pair pulled back at the start of the new trading week as the market shrugged off fears linked to political drama in Italy and continued supporting risk appetite, at least globally, which played into ZAR’s hands.

Higher yielding currencies like the Rand clawed back gains on Monday as the chances of a deal being struck by OPEC seemed to fade, whilst a backlash in the ANC raised hopes President Zuma would resign.