Dust still far from settled post SA electionsThe rand managed a strong recovery to a low of 18.02 in the lead up to the national elections. This move was largely due to the strong precious metal prices, particularly platinum, and the dollar which remained relatively range bound.
The critical resistance levels to watch are the 200-day MA at 18.77 and the 61.8% Fibo retracement rate of 18.87 (very satisfying kiss off the blue neckline and the 61.8% Fibo). A failed break above these levels will allow the rand to recover some of its election losses towards the support rate at 18.55. Continued political uncertainty regarding the new coalition government will however see the pair break above 18.87 and hurtle towards the yearly high of 19.40.
Over the slightly longer-term, a favorable political outcome following the coalition negotiations will attract foreign capital back into the local market which will allow the rand to pull the pair below 18.00 at the back of the year (best case scenario for the rand).
