United States Dollar Growth - This week has witnessed stronger-than-expected GDP growth (3 percent year on year)
As well as a larger-than-expected current account surplus (2.1 percent of GDP)
Which has provided some internal support to the rand
However, the domestic momentum for advances has once again been eclipsed by market risk aversion
The Consumer Price Index (CPI) in the United States recorded inflation and core inflation at 8.6 percent year on year in May 2022
Core CPI data indicated inflation at 6%, compared to 5.9% predicted
Higher inflation supports the world's largest economy's a faster rate of monetary tightening, and as a result, US Treasury yields and the US dollar have strengthened
At the R15.30/$ support level, the USD/ZAR has established a bullish (engulfing) price reversal
The stochastic oscillator moves out of the oversold condition and breaks through trend line resistance to signal the reversal
The price has gotten dangerously near to its original resistance objective of R15.70/$
If this level is breached, the next resistance levels from the move include R15.85/$ and R16.20