Post NFP Rand Price Setups: USD/ZAR, GBP/ZAR And EUR/ZAR
ZAR GAINS SHORTLY AFTER NFP DATA RELEASE
The ZAR gained against the USD, Sterling, and Euro immediately after the latest NFP data showed a pleasant surprise in jobs added over June. However, the unemployment rate worsened from 5.8% to 5.9%. The reason why the unemployment rate worsens despite more jobs being added often comes down to the definition of ‘unemployed’. The recent summer optimism can have the effect of moving a disgruntled former job seeker back into the labor market which would add to the unemployed figure being reported.
SOUTH AFRICA BEGINS ADJUSTED LEVEL 4 LOCKDOWN IN RESPONSE TO HIGH RISING DELTA VARIANT INFECTIONS
The Delta variant of the coronavirus has proven to be highly transmittable, putting massive strain on hospitals in the country – with Gauteng by far the worst affected province. Restrictions on gatherings and alcohol have been implemented in an attempt to curb infections.
Covid infections over time: South Africa
source: Refinitiv
KEY TECHNICAL LEVELS FOR SELECTED ZAR PAIRS
The dollar clawed back some ground vs the Rand after establishing the June low which may be at risk after post NFP price action. The pair broke above the long-term descending trendline but now looks to approach the same trendline but this time as a level of support. 14.14 looks to be the level to watch as a gauge of a continued, deeper pullback. However, a close above the trendline could make for an interesting start to next week’s trading as 14.50 would become the next psychologically important level to assess a potential long term reversal.
USD/ZAR Daily Chart
Chart prepared by Richard Snow, IG
GBP/ZAR
GBP/ZAR followed much of the recent USD/ZAR price action and witnessed a move higher off the recent low. However, the ascending channel has been contained by the psychological level of 20.00 and today showed another strong rejection off this level as well as the 100 SMA. A break below the ascending channel and the 19.50 level could indicate a greater pullback of the recent bullish price action.
GBP/ZAR Daily Chart
Chart prepared by Richard Snow, IG
EUR/ZAR
Yesterday the EUR/ZAR pair threatened to break above its long-term trendline for the first time since March this year and did so again today (blue circle). However, price action started to drop lower in the lead up to the NFP to trade below the 17.00 level. 16.70 is the next level of support if the pullback is set to continue. A break above the long-term trendline and move towards 17.50 are required before considering any potential change in the long-term trend
EUR/ZAR Daily Chart
Chart prepared by Richard Snow, IG
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