The USD/ZAR’s decline for the 3rd straight session follows disappointing Non-farm Payrolls numbers. In a Bloomberg TV interview, Minneapolis Federal Reserve President Neel Kashkari said the NFP report validates the Federal Reserve’s outcome-based approach to monetary policy.
The NFP outcome showed a rise in the unemployment rate from 6.0% to 6.1%, and an addition of 266K jobs in April, down from 770K jobs added in March. The Fed had earlier declared in various fora that it would only consider tapering of the QE program if specific employment and inflation criteria are met.
The 0.79% decline in the USD/ZAR reflects the market sentiment of traders to the interest rate differential between the greenback and the Rand. With the low-interest environment in the U.S. set to continue, the likelihood of carry-trade opportunities remains, favoring demand for the Rand over the U.S. Dollar.
Technical Outlook for USDZAR
The break of the 14.15360 support level is on the cards following Friday’s intraday violation. A confirmation of this breakout targets the 13.97151 support (23 December 2019 low), with 25 February/15 July 2019 lows at 13.80403 serving as an additional target to the south.
On the other hand, a recovery above 14.52955 targets the 14.71708 resistance, with 14.89528 and 15.21122 serving as additional upside targets along a recovery path.
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USD/ZAR Daily Chart
