The USD/ZAR is wavering today as investors continue to worry about the health of the South African economy. The South African rand has dropped by more than 3.60% in the past few days and is now trading at its lowest level since January 18.
What’s happening: The South African economy is under pressure as the number of coronavirus cases in the country continues rising. The new wave is being driven by the new strain of the virus that is spreading faster than the original one.
In a statement yesterday, Moderna said that its vaccine was effective against this strain. Still, the South African government has a long way to start administering the vaccine. As such, the economy will possibly take a longer period to recover.
Recent data suggested that the mining sector deteriorated in November and that the unemployment rate continued to increase in the country. Just last week, the South African Reserve Bank (SARB) left interest-rate unchanged and hinted at future interest rate hikes.
USD/ZAR technical outlook
The USD/ZAR has risen for the past few days as the South African economy continues to weaken. On the four-hour chart, the price is slightly above the 25-day and 15-day exponential moving averages (EMA) while the RSI has continued moving higher. The price is also attempting to move above the important resistance of 15.37.
Therefore, the pair will likely continue rising as bulls target the next resistance level at 15.66. However, a break below the support at 15.00 will invalidate this trend.
USD/ZAR technical chart