FX & FI Technicals
21 February 2022
Dollar/Rand Weekly Close
We are now at the precipice of whether or not Russia will invade Ukraine.
Should the invasion take place we should see ST risk off trading followed by more strength in the ZAR.
The below commentary remains well and truly intact for now.
What I see is R11.50 over the next 17 months.
I am convinced that the ZAR is in a multi-year corrective phase vs. the USD and that from today on, all upward spikes on this chart are well worth a short!
This chart could easily have a leg higher and trade toward the R16.77 level in the coming weeks.
This could be attributed to Russia invading the Ukraine or China invading Taiwan or Iran attacking Israel or all three, which should provide a risk – off environment, causing a quick and painful weakening of the ZAR.
An event of this nature should be seen for exactly what it is, an opporutunity to sell the USD and buy the ZAR.
Until then, the range is likely to be R14.88 – R15.50 and I would seriously consider owning the bottom of the range! – hopefully some of you bought the sub R15’s, even as just a ST hedge against war.
Dollar/Rand Daily Candle
#No Change in commentary
Based on the charts current formation, we would only look to get long sub R15.05 scale down to the R14.80 level. – hope you bought some USD last week.
The daily chart fits into my weekly view.
I want a last leg higher into the R16’s to complete the chart. (but what I want does not count)
I cannot stress enough how important patience is and keeping your mind clear as emotions are sure to get the better of many this year.
Dollar/Rand 240 min Candle
Currently, there is no decent trade that I can see on an RR basis, as I always require a 3/1 ratio.
However, this chart’s current formation leads me to believe that we will see a trade toward R15.70 and potentially higher.
So, I have decided to get long and stay long until either R15.70 or until I am stopped out through R15.00!
Euro/USD Weekly Close
This chart has made a decent spike at $1.1142 and this appears now to be a strong weekly close V bottom.
In the ST, should we see this chart move back over $1.450 – $1.16! – This is currently underway.
I would be looking a buying the Euro on a dip south of $1.1300.
US Dollar Index Weekly Candle
#No Change in commentary
I am changing my view until further notice, and I think we are headed back to the 88.00 level over the next few months.
The chart’s upside momentum has failed. IMO
SA Government Bond 30 Year Yield Daily Close
The chart has now made a very solid base around the 10.30% level.
The chart remains range-bound but we feel the move higher toward the top of the range at 11.40% is on the cards before looking to start a severe leg lower to sub 9.00%.
US Government Bond 30 Year Yield Weekly Close
#No Change in Commentary
This chart is heading to 3.00% in my opinion.
I would buy any move back the MT trend line!