Gapex Morning Gut Feel Report 11th of August

ZAR still stronger O/N but stalling
Importers should look at % covering
Offshore investors looking at the higher yield in SA

ZAR trading session over last few days has seen the ZAR trading to its best level in over 10 months with it reaching 13.20. It eventually traded above the 13.30 level as there was importer demand. ZAR has stalled below the level of 13.20. Overseas investors are now looking for higher yields, as they look to SA for the return. I still think Importers should look at % covering, while the major currency rates are looking so good. Talking to traders, they are not as bullish as they were in the earlier days and seeing the ZAR much lower and are looking at building up long dollar positions.

USD/ZAR Hourly Candle
The market definitely panicked yesterday and sold off hard with a low at R13.20.
This might be the ST low or it might not and thus I will stick to my guns and say that we should not look to pick bottoms here and wait for a bottom to form before getting involved.
It still feels as though there is more pain to come and with most banks and economists now calling for the mid R12’s I would remain very wary.
On a side note, none of these economists and banks were calling for the mid R12’s when we were at R15.30.
Use it, don’t use it!

USD/ZAR Daily Close

The chart is currently testing it’s LT support at R13.20.

I would continue to buy this chart into weakness for my longer term view as we feel that overall this chart remains bullish until we

see a daily close under R13.00.

For those that are square these are great levels to start building a USD long position.

“Play the market only when all factors are in your favour. No person can play the market all the time and win. There are times when you should be completely out of the market, for emotional as well as economic reasons. – Jessie Livermore“