- The USD/ZAR reached an all-time high
- South African government asking the IMF for help due to the pandemic
- The president ordered to start easing the restrictions of coronavirus lockdown
Monthly Time Frame:
Since 2011, the US dollar has been showing an appreciation against the South African Rand. Last month, the USD/ZAR succeeded to break the white monthly resistance (17.36 mark) and marked a record high.
The bulls are taking control over the bears, and bullish sentiment is all we could see on the chart below.
4-Hr Time Frame:
The 4 Hr time frame will give us more an idea of how the price might move in the short term.
A big divergence is noticed between the RSI values and the price of USD/ZAR. The dollar to the ZAR is showing higher highs while the RSI values are displaying lower highs which indicates a potential reversal.
A downward movement will be confirmed if the price manages to close below the 100 SMA (green line). If USD/ZAR rises and breaks the 19.35 mark, there is a huge possibility that it will display a new record high.
South Africa is about to end its battle against the pandemic, last week the South African President Cyril Ramaphosa stated that on the 1st May the government would decrease the restrictions of coronavirus lockdown.
But the battle has left a big hole in the South African economy. Now they are urging the International Monetary Fund (IMF), World Bank, New Development Bank of the BRICS and African Development Bank to help with a 500 billion Rand loan as a rescue plan from the coronavirus crisis.
“The World Bank has said …South Africa can access a loan of about $50 million, the New Development Bank did say long ago that they have set aside a billion dollars that we can access and again we will be accessing that,”Mogajane said to Reuters
The IMF responded by declaring that the South African government can apply for up to 4.2 billion US Dollar to fight the slow economy.
Both the US and South African presidents declared a reopen of their economies, let’s see how the investors will react towards the USD/ZAR in the forex market.