Jump to content

USD/ZAR Forecast: Rand Opens 2022 in the Green After Broad-based EM Gains

Recommended Posts


  • EM’s start the year off with a bang.
  • Commodities forecast a positive for the ZAR.
  • Bullish flag pattern remains intact.


2021 started strong for the South African rand but quickly faded midway through, resulting in a poor performance (-8.2%) against the U.S. dollar relative to its Emerging Market (EM) peers – see graphic below.


ZAR and other currencies VS USD

Source: Reuters

The battle with Omicron and COVID-19 as a whole continues into 2022 as rising cases endure in many parts of the world despite positive data around certain vaccines and their efficacy. The new year begins with markets favoring riskier currencies including the ZAR which has pulled back over the festive period last year. The dollar is primed for lift off in 2022 with a hawkish Fed set to close off the tapering process and could hurt EM’s across the board.

Commodities including the South African linked platinum, iron ore and coal are set to remain elevated this year and could pose an opposing force against a stronger dollar. Overall, the outlook remains bleak for the rand and central bank decision making by the South African Reserve Bank (SARB) will be crucial as the tug of war between economic growth, currency protection and inflation develops.


Both U.S. and South African economic data are scheduled for today with U.S. Manufacturing PMI being the standout which is set for yet another decline. Trader’s should keep an eye out for any significant deviation from the estimates while exercise sound risk management technique.

DailyFX economic calendar

Source: DailyFX economic calendar




USD/ZAR Daily Chart

Chart prepared by Warren Venketas, IG

The formation of the bull flag pattern (blue) extends into 2022 with USD/ZAR bears refusing for a topside breakout. The pullback comes as profit taking around the 16.0000 psychological level along with the fundamental risk on sentiment pushes prices lower.

Price action shows USD/ZAR trading near short-term support at the 20-day EMA (purple) which may provide a springboard for bulls to re-enter the fray. Channel resistance comes back into consideration (black) while traders look for the all important break above 16.0000 which should open up moves towards the 38.2% Fibonacci level at 16.3547.

Resistance levels:

  • 16.3547 – 38.2% Fibonacci level
  • 16.0000
  • Channel resistance (black)

Support levels:

  • 20-day EMA (purple)
  • 50-day EMA (blue)
  • 15.4289 – 50% Fibonacci level


By Warren Venketas, Analyst, 3rd Jan 2022. DailyFX

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
    • Total Posts
    • Total Members
    • Most Online
      10/06/21 10:53

    Newest Member
    Joined 25/09/23 22:13
  • Posts

    • For me, AI can be the most efficient innovation in crypto in a long while. Reliability could certainly grow to an unprecedented high if more improvements are made because I think it's not a finished product yet. I've had the privilege to use some AI-backed trading tool on some platforms like the AI grid bot on bitgetglobal and the algorithm used is quite average at this stage but maybe close to the best at the moment. It simplifies complex trading strategies in one move making it possible to make informed trading decisions on behalf of the user. My take on whether or not it hasn't driven up adoption is that adoption are somewhat slow subject to the volatility of the crypto market and the recent rise in need for regulatory conformity
    • The cryptocurrency industry has grown rapidly in recent years, with the total market capitalization now exceeding $500 billion. However, the industry still faces a number of challenges, including security and on-chain efficiency which is one of the biggest challenges in the cryptocurrency industry, because in recent years, there have been a number of high-profile hacks of cryptocurrency exchanges & wallets, and traders are faced with high cost of on-chain transactions. All of which summed up to make cryptocurrency trading less efficient. In order to address these issues, exchanges are seen taking up the responsibility of solving the problems and I've seen Bitget, a leading cryptocurrency derivatives exchange, recently partnering with Cobo, a leading provider of digital asset custody and security solutions. This partnership is aimed at enhancing the security and efficiency of cryptocurrency trading, which will allow users to seamlessly execute cross-exchange transactions, enabling users to capitalise on arbitrage opportunities without having to deposit their funds directly on exchanges. This could significantly reduce on-chain transaction gas costs and make crypto investments more efficient and cost-effective. Developments like this, if it could be capitalised on would take away bad players from the industry, make crypto a safe place and increase its adoption, but how wide would it cover for the whole users in the crypto space and even Bitcoin?
    • Stock Market Report S&P 500 - NASDAQ 100 - RUSSELL 2000 - DAX 40 - FTSE 100 - ASX 200. Elliott Wave Analysis Summary: Elliott Wave (iv) of  c) of 4 Flat Correction for US Indices and DAX. Trading Strategies: Once Wave (iv) has reached its 38.2% retracement level, short term traders can start to look for short trade setups into Wave (v) of c) of 4. The longer term Video Chapters 00:00 SP 500 (SPX)  11:01 NASDAQ (NDX) 12:39 Russell 2000 (RUT) 14:20 DAX 40 (DAX) 19:37 FTSE 100 UKX (UK100) 23:18 ASX 200 (XJO) 29:08 End Analyst Peter Mathers TradingLounge™ Australian Financial Services Licence - AFSL 317817 Source: tradinglounge    Access Trial    
  • Create New...