USDZAR breached the 14.000 mark earlier today making fresh five-month lows amid general USD weakness. Emerging market currencies boosted from phase one deal between the U.S. and China in the last trading sessions.
The central bank in its November policy meeting kept its benchmark interest rate unchanged at 6.50%. South African Reserve Bank pointed out that might proceed with one more rate cut of 25 basis point in the second half of 2020. The countries GDP contracted by -0.6% in the 3Q while economists were forecasting a 0.1% growth.
Federal Reserve also kept interest rates unchanged with the dot plot now forecasting that the Fed will be on hold in 2020.
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USDZAR Technical Outlook
USDZAR managed to rebound from five-month lows hit earlier today and as of writing managed to turn positive above the 14.000 round figure. USDZAR is 0.43% higher at 14,0786 as the bears are in full control of the trend. The downtrend accelerated after the pair breached the 200-day moving average on December 12th.
On the upside, initial resistance for USDZAR stands at 14.0893 the daily high. A break above could drive the pair to the next barrier at 14.1470 the high from Friday’s session. What can cancel the bearish trend is a move above the 200-day moving average at 14.5840.
On the flip side, the first support for the pair stands at 13.9644 the daily low. More bids might emerge at 13.8745 the low from July 25th. Next target for the bears to the downside stands at 13.8245 the low from February and July 2019.
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