Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Will The EUR/ZAR Rise?

By IFC MarketsForexMay 27, 2019 10:31AM ET
www.investing.com/analysis/will-the-eurzar-rise-200425408
Will The EUR/ZAR Rise?
By IFC Markets   |  May 27, 2019 10:31AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Technical Analysis EUR/ZAR: May 27, 2019

The South African Central Bank may cut the rate at its next meeting in July

The South African Reserve Bank kept the rate unchanged at its last meeting on May 23, but noted the possibility of its reduction in the future. Will the EUR/ZAR rise?

Such a movement is observed in case of the strengthening of the euro and weakening of the South African rand. The rate of the South African Reserve Bank is 6.75%, which is noticeably higher than the 4.4% inflation. The regulator is considering the possibility of a rate cut in order to maintain the economic growth in South Africa. This can have a negative impact on the exchange rate of the rand. The South African Reserve Bank lowered its forecast for the GDP growth in South Africa in 2019 to 1%, while in January it expected + 1.5%. In turn, the euro strengthened amid the resignation of British Prime Minister Theresa May and the defeat of the Euroskeptics party in Denmark at the European Parliament elections. Amid the worsening of the US-China trade war, the European currency may become more attractive for investors.

On the daily timeframe, EUR/ZAR: D1 approached the upper boundary of the long-term triangle. Before opening a buy position, it should be breached up. A number of technical analysis indicators formed buy signals. The further price increase is possible in case of a slowdown in the growth of the South African economy and the strengthening euro.

  • The Parabolic Indicator gives a bullish signal.
  • The Bollinger bands® have narrowed, which indicates low volatility. Both Bollinger bands are tilted upward.
  • The RSI indicator is above 50. It has formed a positive divergence.
  • The MACD indicator gives a bullish signal.

The bullish momentum may develop in case EUR/ZAR exceeds the resistance line of the long-term triangle, the two last fractal highs, the 200-day moving average line and the upper Bollinger band at 16.3. This level may serve as an entry point. The initial stop loss may be placed below the last fractal low, the Parabolic signal and the lower Bollinger band at 15.8. After opening the pending order, we shall move the stop to the next fractal low following the Bollinger and Parabolic signals. Thus, we are changing the potential profit/loss to the breakeven point. More risk-averse traders may switch to the 4-hour chart after the trade and place there a stop loss moving it in the direction of the trade. If the price meets the stop level (15.8) without reaching the order (16.3), we recommend to close the position: the market sustains internal changes that were not taken into account.

Summary of technical analysis

Position Buy

Buy stop Above 16.3

Stop loss Below 15.8

Market Overview

US stocks end the week on a positive note

Dollar falls on durable goods orders decline

US stock market ended marginally higher on Friday in thin trading after back to back losses. The S&P 500 added 0.1% to 2826.06, extending losses 1.2% for the week. Dow Jones industrials rose 0.4% to 25585.69. The Nasdaq gained 0.1% to 7637.01. The dollar weakening continued as orders for durable goods fell a below expected 2.1% in April. The live dollar index data show the ICE (NYSE:ICE) US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, lost 0.3% to 97.552 but is higher currently. US markets are closed today for Memorial Day holiday.

CAC 40 outperforms European indexes

European stocks recovered some of the previous session losses on Friday. The GBP/USD joined EUR/USD’s climb with Pound higher currently while euro resumed sliding. The Stoxx Europe 600 Index recovered 0.6% Friday led by mining stocks. The DAX 30 added 0.5% to 12011.04. France’s CAC 40 rose 0.67% and UK’s FTSE 100 gained 0.65% to 7277.73 as Prime Minister Theresa May announced that she would resign as party leader on June 7.

Shanghai Composite leads Asian indexes gains

Asian stock indices are mixed today. Nikkei gained 0.3% to 21182.58 as President Trump met with Prime Minister Abe to discuss trade and other world issues after meeting Japan’s new emperor, Naruhito, while yen’s decline against the dollar resumed. China’s markets are mixed: the Shanghai Composite Index is up 1.4% while Hong Kong’s Hang Seng Index is 0.2% lower. Australia’s All Ordinaries Index slipped 0.06% with the Australian dollar little changed against the greenback.

Brent down

Brent futures prices are pulling back today. Prices ended higher on Friday: Brent for July settlement added 1.4% to close at $68.69 a barrel Friday, falling 4.9% for the week.

Will The EUR/ZAR Rise?
 

Related Articles

Will The EUR/ZAR Rise?

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email