I have bought USDZAR. FX:USDZAR
Civil unrest has erupted in South Africa after the arrest of former president Jacob Zuma.
The currency pair has been in a downtrend since April 2020 and has just broken the downward channel to the upside.
I prefer trades with such a confluence of factors working in their favor. Let's see how this plays out.
- Sure Capital
Analysis on the chart.
In addition to what I've stated on the charts, watch out for any geopolitical tensions (e.g. tariffs, sanctions etc) that might flare up between China and the US or Australia which might add downside risks for the pair.
Not investment advice.
Since the YC inversion in August last year (2019), there has been a "crack" in correlation between the US02Y and USDJPY.
I expected the YEN to strengthen as the Japanese short the dollar against the YEN to hedge against the rising US Govt bond prices (due to the rate cuts) considering Japan holds a significant amount of US Govt debt.
My initial thoughts on this is...
If the Yield curve Inverts this Year, 2020, it might signal further rate cuts by the FED despite Powell's reluctance to enter the NIRP and ZIRP realm and contrary to the forward guidance.
TIME WILL TELL
-Surecapital
