Source: PaxForex Premium Analytics Portal, Fundamental Insight
UK Public Sector Net Borrowing for August came in at £11.060B, and UK Public Sector Net Cash Requirements at £5.321B. Forex traders can compare this to UK Public Sector Net Borrowing for July, reported at £2.110B, and to UK Public Sector Net Cash Requirements, reported at -£5.087B.
The South African CPI for August is predicted to increase by 0.1% monthly and 7.5% annualized. Forex traders can compare this to the South African CPI for July, which rose 1.5% monthly and 7.8% annualized. The Core CPI for August is predicted to expand 0.4% monthly and 4.6% annualized. Forex traders can compare this to Core CPI for July, which increased 0.7% monthly and 4.6% annualized.
The light economic calendar applies even more focus on the US Fed FOMC policy announcement. Markets expect a 75 basis point interest rate hike, the third consecutive one, and priced it in, but fears over a more hawkish statement keep upside pressure on the US Dollar across all currency pairs and have forced gold to two-and-a-half year lows. Recent surveys show that financial markets slowly began to understand that the US central bank will raise interest rates to 4.50%, with levels between 5.00% and 5.50% at the most hawkish analysts, and more importantly, keep them there throughout 2023.
Some Fed officials want to abandon forward guidance, and any hints of another 75 basis point interest rate increase after the one today could result in a volatility surge. The US Dollar will soon reach an inflection point where a crumbling economy will counter the positive catalyst of higher interest rates. Traders should prepare for wild price swings across the Forex market or avoid US Dollar crosses until after the press conference of the US Fed.
The forecast for the GBP/ZAR is cautiously bullish as price action takes a breather following its breakout above its ascending Ichimoku Kinko Hyo Cloud. Adding to the positive outlook is the upward-moving Tenkan-sen, but short-term bullishness is absent as measured by the flat Kijun-sen. Volatility could increase as bulls and bears fight for control at a crucial support area. Traders should monitor the CCI following its breakdown from extreme overbought territory. It remains well above the zero level and is positioned for a secondary push higher, which could take this technical indicator to a higher high. Can bulls overcome short-term bearishness and pressure 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 19.7830 to 20.0330 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 20.1075
- Take Profit Zone: 20.4700 – 20.6100
- Stop Loss Level: 19.9500
Should price action for the GBP/ZAR breakdown below 19.7830, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 19.9500
- Take Profit Zone: 19.6210 – 19.7910
- Stop Loss Level: 20.0620
Open your PaxForex Trading Account now and add this currency pair to your forex portfolio.
