The USD/ZAR price rose sharply in the overnight session as US Treasury yields rose. The South African rand has declined by almost 6% in the past two weeks.
What happened: The USD/ZAR has rallied recently mostly because of the ongoing sell-off of US bonds. In the overnight session, the yields on the US 10-year Treasuries rose above 1.5% again after a speech by Jerome Powell.
As a result, the South African rand and other emerging market currencies have become under pressure. Indeed, the MSCI EM currencies index is at its lowest level in a few weeks. Other risky assets like technology stocks and cryptocurrencies have also crashed in the past few sessions.
Later today, the USD/ZAR will react to the latest US non-farm payroll numbers. The data is expected to reveal that the US added more jobs in February. Also, the pair will react to the ongoing debate on US stimulus that will take place in Congress.
USD/ZAR technical outlook
The USD/ZAR has been in an upward trend recently. It has managed to move from a low of 14.3920 to yesterday’s high of 15.3540. On the four-hour chart, the overnight high was along the 23.6% Fibonacci retracement level. Further, the price has moved above the 25-period and 50-period WMA. Therefore, the upward trend will remain so long as the price is above the two moving averages.