Source: PaxForex Premium Analytics Portal, Fundamental Insight
The South African Current Account for the first quarter is predicted at ZAR105.0B, and the Current Account Percentage of GDP at 1.50%. Forex traders can compare this to the South African Current Account for the fourth quarter, reported at ZAR120.0B, and the Current Account Percentage of GDP at 1.90%.
South African Mining Production for April is predicted to drop 5.0% annualized. Forex traders can compare this to South African Mining Production for March, which plunged 9.3% annualized.
South African Manufacturing Production for April is predicted to drop 2.0% monthly and 2.6% annualized. Forex traders can compare this to South African Manufacturing Production for March, which rose 0.6% monthly and decreased 0.8% annualized.
US Initial Jobless Claims for the week of June 4th are predicted at 210K, and US Continuing Claims for the week of May 28th are predicted at 1,305K. Forex traders can compare this to US Initial Jobless Claims for the week of May 28th, reported at 200K, and US Continuing Claims for the week of May 21st, reported at 1,309K.
US Natural Gas Inventories for the week ending June 3rd are predicted at 96B cubic feet. Traders can compare this to US Natural Gas Inventories for the week ending May 27th, reported at 90B cubic feet.
The bear market continues to gain strength, and traders will focus on today’s ECB meeting, where economists predict no change in monetary policy but expect clues for changes in the second half of the year. China reported a bigger trade surplus than forecast, as exports surged in May. Traders should brace for more volatility ahead, and the US Dollar is prone to the most downside risk among G7 currencies as the US Federal Reserve fails to understand the impact of its monetary policy over the past 13 years.
The forecast for the USD/ZAR remains bearish after this currency pair moved below its Ichimoku Kinko Hyo Cloud, which shows early signs of bearish pressures with the Senkou Span A drifting lower and the Senkou Span B flat. Volatility is expected to increase, and a short-term price spike is possible, giving traders a higher short-selling entry opportunity. The Tenkan-sen moved below the Kijun-sen, and both continue to move lower. Traders should monitor the CCI, which moved into extreme oversold conditions and recorded a lower low. This technical indicator may initiate a false breakout, from where more downside is expected. Can bears extend the sell-off in the USD/ZAR and force price action 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 15.0930 to 15.3735 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 15.2760
- Take Profit Zone: 14.3970 – 14.5895
- Stop Loss Level: 15.4740
Should price action for the USD/ZAR breakout above 15.3735, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 15.4740
- Take Profit Zone: 15.7830 – 15.8330
- Stop Loss Level: 15.3735
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