The Rand has recovered from yesterday’s drop which was triggered by the discontinuation of its rollout of the AstraZeneca vaccine. The cessation of the rollout occurred after the South African government said it would seek scientific advice on how to proceed with its vaccination program following a trial that indicated that the vaccine did not work in preventing infection from the dominant coronavirus variant in the country.
However, the slip-up in the greenback on stimulus hopes has caused investors to ditch the lower-yielding US Dollar in favour of the Rand, which has an interest-rate differential of 3.4% on the US Dollar.
Technical Outlook for USDZAR
The USDZAR has violated the 14.89528 support and would be looking for a close below the 21 January low before the extension of the decline is confirmed. The next downside target would lie at the 14.54458 support, formed by the cluster of lows of December 2020. Below this level, the 14.28370 support marks the next available target.
On the flip side, a failed break of the current support, or recovery in the greenback could spark a support bounce. This would target the 15.21122 resistance, with 15.32751 also lining up as an additional target to the north.
USDZAR Daily Chart