The US dollar has shot straight up in the air against the South African Rand during the trading session on Thursday, as we have recently seen less than impressive GDP figures coming out of South Africa. The market reacted very negatively to the South African Rand as GDP came in negative. However, when we look at this chart, it’s easy to see that this move started quite some time ago. We had broken above a symmetrical triangle, and now look as if we are ready to make a serious move.
All things being equal though, we are at a major crossroads in the form of the 15 Rand level. 15 of course is a major psychologically significant round figure, so it makes sense that we will continue to see a lot of attention paid to this area. The fact that we are now looking at the jobs number of course makes the session even more interesting on Friday, as this pair will also probably figure to show a lot of volatility due to risk appetite.
Pullbacks are likely, at least in the short term but if we can break above the 15.10 Rand level, then I think it opens up the door to a much larger move. All things being equal though, as we head into the jobs number, there will be a lot of people taking profits as this pair will be extraordinarily sensitive to what happens next, as it will be a move based upon the greenback and of course this pair is not as liquid as some of the major’s.
At this point, it is fairly likely that a pullback is going to end up being a buying opportunity, with the 14.50 Rand level being a nice support of floor for the market.