Source: PaxForex Premium Analytics Portal, Fundamental Insight
The South African CPI for July is predicted to increase 1.4% monthly and 7.7% annualized. Forex traders can compare this to the South African CPI for June, which rose 1.1% monthly and 7.4% annualized. The Core CPI for July is predicted to expand 0.6% monthly and 4.5% annualized. Forex traders can compare this to Core CPI for June, which increased 0.6% monthly and 4.4% annualized.
US Preliminary Durable Goods Orders for July are predicted to increase by 0.6% monthly, and Durables Excluding Transportation by 0.2% monthly. Forex traders can compare this to US Durable Goods Orders for June, which rose 2.0% monthly, and Durables Excluding Transportation, which increased 0.4% monthly. Capital Goods Orders Non-Defense Excluding Aircraft for July are predicted to rise 0.3% monthly. Forex traders can compare this to Capital Goods Orders Non-Defense Excluding Aircraft for June, which increased 0.7% monthly.
US Pending Home Sales for July are predicted to drop 4.0% monthly. Forex traders can compare this to US Pending Home Sales for June, which plunged 8.6% monthly.
US Crude Oil Inventories for the week ending August 19th are predicted at -0.933M. Traders can compare this to US Crude Oil Inventories for the week ending August 12th, reported at -7.056M. US Gasoline Inventories for the week ending August 19th are predicted at -1.464M and US Distillate Stocks at 0.580M. Traders can compare this to US Gasoline Inventories for the week ending August 12th, reported at -4.642M, and US Distillate Stocks at 0.766M.
Economic data out of the US came in well below expectations, with the plunge in the service sector, which account for roughly 70% of GDP, suggesting the country remains on a recessionary path. Comments from the US Federal Reserve remained hawkish, as inflation remains deeply embedded. More data is necessary, but the US entered a technical recession with GDP contractions in the first and second quarters of 2022. The third quarter will either print a third consecutive GDP decrease or a minimal gain, showing an overall GDP drop for this year. The US Dollar is vulnerable to a notable contraction.
The forecast for the USD/ZAR turned bearish after this currency pair advanced into its horizontal resistance area. Confirming the lack of short-term bullishness is the downward drifting Kijun-sen, while volatility could rise as the Tenkan-sen moves higher. The Ichimoku Kinko Hyo Cloud suggests rising bearishness, with the Senkou Span B flat and the Senkou Span A moving lower. Traders should monitor the CCI after it recorded a lower high in extreme overbought territory. A breakdown below 100 may trigger a sell-off in this currency pair. Can bears regain complete control over price action in the USD/ZAR and force it into its horizontal support area? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Should price action for the USD/ZAR remain inside the or breakdown below the 14.5725 to 14.7685 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 17.0250
- Take Profit Zone: 16.0000 – 16.2300
- Stop Loss Level: 17.5000
Should price action for the USD/ZAR breakout above 14.7685, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 17.5000
- Take Profit Zone: 18.1000 – 18.2500
- Stop Loss Level: 17.3000
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