USD/ZAR Talking Points:
SA Retail Sales Continue Ten Month Slump
SA retail sales data came in worse than expected at -3.5% compared to the -2.7% forecasted. This marks the tenth straight decline in year on year data and reflects the continuing challenge the sector faces even after looser Covid-19 restrictions.
For all market-moving data releases and events see the DailyFX Economic Calendar[4]
Immediate Response and Key Technical Levels (USD/ZAR)
The immediate reaction to the release was rather muted as the Rand weakened slightly against the US dollar[5], approaching the long term trendline. However, the USD/ZAR[6] pair may experience elevated volatility as we count down to the FOMC[7] rate announcement and the eagerly awaited press conference to follow later today.
Chart prepared by Richard Snow[9], IG
The daily chart reveals the long term downtrend[10] that was briefly disrupted earlier this month only to drop back below the long term trendline acting as resistance[11]. The USD/ZAR[12] pair has continued to trade broadly within the 15.7000 to 14.4000 range and currently trades close to the middle of this range (orange dotted line) as market participants await the FOMC speech for direction.
Another break above the long term descending trendline would see the 15.5400 level become the next level of resistance[13] before the top of the range at 15.7000 becomes relevant once
