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Usdzaranalysis

A differnt perspective on the value of the randAccurately and reliably forecasting a currency is near impossible, however, its easy to have an opinion. The question is, what do you base your opinion on? As a South African, I follow the rand closely, particularly against the US dollar and the pound. One can use a purchasing power parity (PPP) or real effective exchange rate (REER) chart to calculate a "fair value" through analyzing the numbers. But the rand has everything to do with sentiment and the global economy and very little to do with the South Africa economy. I put this chart together to try and understand the rand from a global context. Assumption: there is a high correlation between the price of gold in US dollars and the M2 money supply. The chart shows the M2 money supply in orange compared to the price of gold in rand terms which is shown by the blue line. We can see that the two lines have significantly diverged from each other over the last 8 months. If we assume that the M2 line will only ever go up and can never revert down, then we can assume that the price of gold in rand terms must also go up over time, all else being equal. It would therefore stand to reason that the price of gold in rand terms is in a cyclical low and may suggest an attractive entry point. What about the correlation between the price of gold in rand terms vs the rand dollar exchange rate? The green line shows the rand dollar exchange rate in comparison to the price of gold in rand terms. It's evident that there is a high correlation between the two however, the the divergence between the two particularly over the last 2 years, shows the real appreciation in the price of gold. So where does that leave us? The assumption that the price of gold in rand terms is correlated to that of the M2 money supply, suggests that the price of gold in rand terms needs to increase. The correlation between the price of gold in rand terms and the rand dollar exchange rate suggests that the rand needs to weaken or depreciate over time. Makes sense? I therefore ask the question as to whether the denominator that one should also follow over time is actually the direction of the M2 money supply in relation to the rand? This also backs into monetary policy in the largest economies and the US in particular. It stands to reason that the rand is far to strong at these levels if the world continues to print money? Its not sustainable! Thoughts? Please like and follow for daily posts on various asset classes. Please also share your views on the trading ideas and whether or not you find them to be of any value to you as a trader. Please note, this idea is shared for educational and discussion purposes only and should not result in speculative investment decisions in any asset class.
FX_IDC:XAUZAR
by JesseMorgans
USDZAR weekly candleThe pair has been bouncing between the 200-week MA and 100-week MA since the start of the year. The 200-week MA is a strong support rate for the pair and a strong catalyst will be needed for the rand to sustain rates below this MA (such as the "Ramaphoria" period in 2017). Technical indicators are favoring a topside break out of the downward channel from 2020. The weekly MACD is holding a buy signal. There is divergence on the weekly RSI which is suggestive of rand depreciation. A falling wedge pattern also seems to be forming.
Long
by GustavFourie96
USDZAR 14.93870 + 0.05 % LONG IDEA * STRUCTURE & PRICE ACTION Good day everyone Hope everyone is having a good week in the markets and a beautiful day ahead. Here's a look at the USDZAR from the 4H chart * The pair is currently trading in a Symmetrical triangles which occur when a security's price is consolidating * The pair has touched the roof of structure twice and saw a rejection acting as a resistance level. * The symmetrical structure pattern has been respected, looking for a break above o structure to signal continuation with the bulls *^ A break below of structure changes The trading plan. * follow your entry rules on entries * significant moves with the bears change the plan. lets see how it goes. AS ALWAYS PROPER RISK MANAGEMENT AND A LOT OF PATIENCE & AGAIN many stars must align with the plan before executing the trade, kindly follow your rules. HAPPY TRADING EVERYONE & LET YOUR WINS RUN... _________________________________________________________________________________________________________________________ ENTRY & SL - FOLLOW YOUR RULES RISK-MANAGEMENT PERIOD - SWING TRADE __________________________________________________________________________________________________________________________ If this idea helps with your trading plan kindly leave a like definitely appreciate it.
Long
by PULEMokhothu
4
USDZAR 14.72176 + 0.1% MONTHLY FORECAST PRICE ACTION & TECHNICLHEY EVERYONE Hope you guys are having a good one the chart are playing along, Here's a look at the DOLLAR / ZAR just a predictive young forcaust looking from a higher time-frame trying to figure the strength of the RAND in the near future when we take a close look we see that the pair is trading in a ascending channel just on a pretty large scale respecting structure aside from that fake out that spiked out of the ascending channel but otherwise the pair has respected structure now the RAND has had massive gains against the DOLLAR due to a number of factors showing strong momentum to the down side. of-cause we would expect some correction in the near future but will we see a break below of the descending channel structure and see the Rand gain some strength targeting the R13.000 MARK Pushing it R12.0000 this year against the dollar, i believe this is highly possible but lets let the market tell its story and only time will tell. AS ALWAYS PROPER RISK MANAGEMENT AND A LOT OF PATIENCE & AGAIN many stars must align with the plan before executing the trade, kindly follow your rules. LET'S SEE HOW IT GOES.. HAPPY TRADING EVERYONE & LET YOUR WINS RUN... _________________________________________________________________________________________________________________________ ENTRY & SL - FOLLOW YOUR RULES RISK-MANAGEMENT PERIOD - SWING TRADE __________________________________________________________________________________________________________________________ If this idea helps with your trading plan kindly leave a like definitely appreciate it.
by PULEMokhothu
3