Gapex Gut Feel Report 12th June 2017

Rates
USD / ZAR: 12,8576
EUR / ZAR: 14,4176
GBP / ZAR: 16,405
ZAR / JPY: 8,5627
EUR / USD: 1,1209
GBP / USD: 1,275
USD / JPY: 110,25
Ø Moody’s Downgrades SA
Ø SA No New Policy Direction
Ø WC Fires could cost SA billions
Ø UK Politics in the spotlight
Most of the focus this morning has been on Moody’s statement and downgrade late on Friday evening of SA’s rating. The Ratings downgrade was expected for months following on from the other 2 ratings agency downgrades and the markets showed little reaction from investors. The ANC showed concern but there’s very little policy direction and it’s the ANC policies and direction which have pushed SA to these downgrades. The next step will more than likely be to junk status with few signs from the ruling party for a real reform plan. The devastating fires in the Western Cape could cost insurers up to R45billion. UK’s May will be under pressure with the current poor performance in the polls. Government and Fin Min Gigaba spinning stories that it’s the private sector’s fault for the current recession will not give any more confidence to trusting the policies of the ruling party nor will it bring with it any investment ratings upgrade. Trading range for the day 12.75-13.10
Economic Data: 12th June
Ø US Monthly Budget Statement
Ø UK CPI YoY

USD/ZAR Hourly Candle

The Moody’s 1 notch downgrade seems to have been priced in and I would not be surprised to see the chart come off. I would however look to buy weakness with

a daily close under R12.40.

  “There is no training, classroom or otherwise that can prepare for trading the last third of a move, whether it’s the end of a bull market or the end of a bear market. There’s typically no logic to it; irrationality reigns supreme, and no class can teach what to do during that brief, volatile reign. The only way to learn how to trade during that last, exquisite third of a move is to do it, or, more precisely, live it..”

PTJ

USD/ZAR Daily Close

The Moody’s 1 notch downgrade seems to have been priced in and I would not be surprised to see the chart come off. I would however look to buy weakness with

a daily close under R12.40.

“I see the younger generation hampered by the need to understand and rationalize why something should go up or down. Usually, by the time that becomes self-evident, the move is already over.” – Jesse Livermore

 

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