With just 2 months left in the year, the Rand is as choppy as ever...
This week saw swinging momentum from highs to lows in quick succession. It is tough for importers, exporters, investors and traders alike to try and manage exposures in such volatility.
But the roller-coaster keeps going - and it is a case of keeping up.
The range for the week was big, but it was far from one direction only from the market.
Overall, the Rand came out on tops, despite so many difficult local events!
Let's dive into the finer details, and get some idea on where we are going in the next 5 days...
Some big moments dropped in the week -
What a week it was!
These daily range's give some idea -
The ding-dong, tit-for-tat nature of the week left quite a chart to look at by the end of the 5 days!
It was hard to believe, looking at the week of events, that the Rand had managed to pull off such a 'Houdini' escape!
Considering that many were still in shock from the stark outlook in the mini-budget, it made the feat even more impressive.
On that note, the fiscal commission gave 5 points for consideration on the back of the budget:
A tall order...
...but some very constructive advice, even if some of it is a little sugar-coated.
And the other event to overcome for the Rand was the update on SA's unemployment situation, as the unemployment percentage increased to 27.5%, continuing its trend in the wrong direction.
This is not the news Ramaphosa wanted, just after having concluded the jobs summit - sure, it is perhaps too soon for any results of discussions at the summit to be seen, but there definitely could have been a better start to the jobs drive than this!
Despite that, the Rand flew onwards, cruising to touch a low of R14.36/$ on Thursday!
This was on the back of some excellent work from President Ramaphosa, as he fired the head of SARS, Moyane, following his trouble making stint as the chief of the organization. By all reports, he has driven SARS into the ground, with reckless mismanagement, as well as the other points based on which the President fired him.
This was definitely an anti-corruption powerplay from Ramaphosa, and a good one at that!
There were plenty of other talking points for the week:
And one would have expected this to have a very negative effect on the Rand...
...but it didn't.
Friday was another stronger day for the Rand, with the market hitting the best level of 14.22 before weakening slightly to end the week around R14.31/$...
After losing some ground in initial trade, the Rand has pushed its advantage further pushing below R14.20/$.
So where to for this week? We have several economic events which could provide triggers for moves, the big one being US interest rates.
But as we saw from the Non-Farm Payrolls on Friday, the market doesn't always react the way conventional wisdom would dictate.
In fact, it hardly ever does.
That is because the market is not moved by rational forces, but predictably irrational persons making emotionally-charged decisions - that tend to drive the market from one extreme of sentiment to another. And this happens in patterns that repeat themselves over time ... in varying degrees.
The best way to get an idea of where the market is headed is to understand what pattern of sentiment is currently in play and how such patterns played out historically.
This is what the Elliott Wave Principle provides, which we use together with a combination of price-ratio analysis, momentum and time-cycle studies to give clients the most likely outcome for the next few days, weeks, months and years ahead.
To your success~
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