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Daily Dose

Daily Dose

Good Morning,

On the wires…

  • Russia is Europe’s biggest energy supplier – but US sending more gas by boat than Russia is by pipeline
  • First Ukrainian grain ship set to pass Bosphorus Strait after inspection
  • Sri Lankan Trade Union leader Joseph Stalin arrested for holding protests
  • Load shedding pushed to Stage 4 Today
  • Cop arrested for allegedly demanding R500k bribe for sealing coal mine deal
  • High-flying Proteas claim victory in opening T20 after Ireland scare

Quote of the day…

“It is surprising what a person can do when they have to, and how little most people will do when they don’t have to. “ – Walter Linn

The indicators…

Currency crackdown…

FXOne would like to thank Warrick Butler from Standard Bank for his contribution to the crackdown this morning

Current level: 16.7400/16.7500

Range yesterday: 16.6825-16.9050 and NY close: 16.7550

So far, this week has progressed exactly as anticipated with price action extremely volatile with liquidity gaps abounding almost on an hourly basis. It has made market making even more interesting but definitely not dull. The Rand has tried to break lower but failed in the mid-16.40’s a couple of times. By the same token the Dollar has pushed my patience to the limit getting up close to 16.90 a couple of times too, only to come crashing back to mid-range obscurity. The Dollar has recovered from earlier week losses especially against the Yen. That move to 130.40 can I guess be attributed to the last batch of positioning calling time as Nancy Pelosi in turn tested the patience of Xi et al with her Taiwan visit. There was maybe a small case for risk aversion due to the fear of a war that no-one ever wants. You wonder why people still feel the need to prod the tiger, especially in light of the disaster that is transpiring in the Ukraine. As always, the only losers are the poor citizens of each side with the politicians sitting pretty in their gilded towers. Not learning from history is one thing, but surely we can take something from present day?

As things stand the market is awaiting tomorrows US data with fervent anticipation. Stock markets have recovered somewhat this week, whilst commodities have followed FX by trading sideways. Gold has recovered off its recent lows and that will certainly help revenue for the local mines and thus increased supply of Dollars. That being said, we are still in an environment that is wary of major risk with the Fed still in tightening mode and of course our much-maligned power provider has enacted Stage 4 load shedding again. So even with commodity prices recovering, the task of getting them out the ground has been made that more difficult.

Technically speaking the Rand has seen two recent minor higher lows and higher highs and the pressure is building for another move back to the next resistance level of 16.9500. A break of that and we should see another retest of 17.30/35. It is by no means guaranteed but is the way I am looking to manage risk for the remainder of the week until we get the data release tomorrow.

Good luck out there and have a great day ahead

Support levels – 16.4200, 16.3500, 16.1800, 16.1000, 15.9500

Resistance levels – 16.6500, 16.8000, 16.95/17.00, 17.1000, 17.2000, 17.30/35

On the radar…

  • EU – ECB Economic Bulletin
  • EU – ECB’s Elderson Speaks
  • UK – Construction PMI
  • UK – BoE Interest Rate Decision
  • UK – BoE Governor Bailey Speaks
  • US – Initial Jobless Claims
  • US – Trade Balance
  • US – Fed Member Mester Speaks

Did you know?

In a group of 23 people, there is a 50% chance that two will share the same birthday.

Have a good one,

Kyle

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