Gapex Morning Gut Feel Report 23rd of November

1. SA Hawks to probe corruption against President Zuma?
2. SA unemployment rate – calls for crisis talks on deteriorating employment dynamics
3. SA nuclear deal delayed
4. US Multiple rate hikes pondered

ZAR staged the strongest recovery and was the stand-out performer leading the emerging market basket of 24 currencies. Nuclear deal postponed will come as a relief to National Treasury. Unemployment figures however didn’t reflect great results at 27.1% to highlight the current labour crisis in SA. Data out of the US will influence direction on the USD-ZAR through the week ahead. Mixed results are unlikely to change expectations for an FOMC rate hike in Dec. Any weaker than expected results will however assist the ZAR extend its recovery. The technicals are suggesting that the ZAR could perhaps test levels closer to 13.9000 through the course of the trading session. Much will depend on the US data, but the USD-ZAR is trading heavy. Range for the day: 13.90/14.20.

USD/ZAR Hourly Candle

This chart remains in decent shape.

We are buying the USD from R14.20 – R14.00 with a stop under R13.95.

“In Fundamentals might be good for the first third or first 50 or 60 percent of a move, but the last third of a great bull market is typically a blow-off, whereas the mania runs wild and prices go parabolic.”

– Paul Tudor Jones

USD/ZAR Daily Close

We are waiting to buy the USD in size, but will have to wait for a decent pullback.

At this stage we do not have levels as we will need this chart to play out overtime before making a firm call.

“I believe the very best money is made at the market turns. Everyone says you get killed trying to pick tops and bottoms and you make all your money by playing the trend in the middle. Well for twelve years I have been missing the meat in the middle but I have made a lot of money at tops and bottoms. – PTJ