Gapex Gut Feel Report 5th June 2017

Rates
USD / ZAR: 12,8287
EUR / ZAR: 14,4565
GBP / ZAR: 16,5153
ZAR / JPY: 8,6129
EUR / USD: 1,1261
GBP / USD: 1,2866
USD / JPY: 110,69

 

Ø ZAR regains losses after S&P rating decision.
Ø Internal sagas will play big roll on demise of ZAR
Ø Terror attack’s causing huge uncertainty abroad

 

ZAR strengthened at end of day with S&P affirming SA’s rating, but we are not out of the woods yet, as we have Moody’s decision still to come and looks like we could face a single notch downgrade. This may be a soft approach but with more and more corruption by the top echelons appearing, this will surely put more doubt to what extent they should downgrade, even if the criteria are economic growth and political uncertainty. Amongst all the internal political sagas and corruption, abroad we have further terror attacks in London and soon the market will turn to safe-haven commodities and currencies, no matter the return on investment or price. SA underlying fundamentals remain ZAR positive and supportive, but my feeling is the bubble on internal problems is about to burst at the expense of the ZAR. Importers should look at covering a % of their commitments, as rates across the board are very favourable. Talking to traders they’re looking at increasing their long dollar positions due to the uncertainty locally and abroad. Trading range 12.75-13.55

 

Economic Data: 5th June
Ø US Factory Orders
Ø US Factory Orders exTrans
Ø US Labour Market conditions

USD/ZAR Hourly Candle

This chart has broken out and we are now looking to buy the  pullbacks done to the R12.66 level as we feel a move over R14.00 is imminent!

  “If I have positions going against me, I get right out; if they are going for me, I keep them… Risk control is the most important thing in trading. If you have a losing position that is making you uncomfortable, the solution is very simple: Get out, because you can always get back in.”

PTJ

USD/ZAR Daily Close

Overall, we are now bullish and we would build a long position here and down toward the R12.66 level.

We feel the possibility of a big move is imminent. 

“The game of speculation is the most uniformly fascinating game in the world. But it is not a game for the stupid, the mentally lazy, the person of inferior emotional balance, or the get-rich-quick adventurer. They will die poor.” – Jesse Livermore

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