ZAR Under Pressure
Following the initial sell off in ZAR on Friday as news of the variant first broke, price has since stalled and remained within the range of that initial day’s decline. For now, price is continuing to hold support at the 6.964 level. However, given the downside risks in the outlook, pertaining to the Omicron news-flow, and the likelihood that JPY strengthens further on safe haven demand, there focus is on a continuation lower, in line with bearish MACD and RSI readings. With this in mind, bears can look for a break of Friday’s lows (sub 6.964) targeting a move down to the 6.669 level initially and a test of the channel low.
Keep An Eye On
The key issue here is news around the Omicron variant. If incoming news worsens this will increase the pressure on ZAR and increase the safe haven demand for JPY, driving this pair lower. If news flow lightens up, for example if scientists declare the strain is not as lethal as thought or is more responsive to vaccines than first thought, this will likely fuel a reversal in the current dynamic.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.