Source: PaxForex Premium Analytics Portal, Fundamental Insight
South African M3 Money Supply for November surged by 8.76% annualized. Economists predicted an increase of 8.45%. Forex traders can compare this to South African M3 Money Supply for October, which rose by 9.82% annualized. Private Sector Credit for November expanded by 8.30% annualized. Economists predicted an increase of 9.05%. Forex traders can compare this to Private Sector Credit for October, which rose by 9.34% annualized.
The South African Trade Balance for November is predicted at $13.80B. Forex traders can compare this to the South African Trade Balance for October, reported at -$4.31B.
UK Nationwide House Prices for December are predicted to drop by 0.7% monthly and rise by 2.3% annualized. Forex traders can compare this to UK Nationwide House Prices for November, which contracted by 1.4% monthly and expanded by 4.4% annualized.
Today is the final trading session of 2022, and with early closes in major financial centers, trading volumes should be razor-thin. Price action may show erratic moves, as usually ignored economic releases will gather more attention as traders seek clues for short-term moves. Portfolio managers may also make final adjustments to their holdings, which can spike volume and volatility in the last hour of trading. The UK 30-year Gild auction may receive extra attention as the final piece of relevant economic data for 2022.
South Africa and the South African Rand may get a boost in 2023 from the anticipated rise in gold prices if they can maintain production levels. The positive impact will face counter-pressures from an anticipated global recession. The UK economy can withstand downside pressures better than South Africa, especially since the Bank of England was the first G20 central bank to provide an honest assessment of economic conditions and has acted accordingly. It should allow the GBP/ZAR to enter a cycle of higher highs and higher lows, gradually pushing price action higher.
The forecast for the GBP/ZAR turned bullish after this currency pair corrected into its horizontal support area, located inside its ascending Ichimoku Kinko Hyo Cloud. The descending Tenkan-sen completed a bearish crossover below the flat Kijun-sen. It may increase volatility over the coming trading sessions, but the overall bullish outlook is intact. Traders should monitor the CCI after it has moved into extreme oversold territory before drifting higher. A breakout above -100 could deplete short-term bearishness and allow price action to reverse its correction. Can bulls overcome bears and push the GBP/ZAR into its horizontal resistance area? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Should price action for the GBP/ZAR remain inside the or breakout above the 20.2060 to 20.5135 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 20.4065
- Take Profit Zone: 20.8950 – 21.1830
- Stop Loss Level: 20.0980
Should price action for the GBP/ZAR breakdown below 20.2060, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 20.0980
- Take Profit Zone: 19.4715 – 19.8770
- Stop Loss Level: 20.2060
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