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Category: Market Analysis

  • EUR/USD Weekly Outlook: Range Trading Ahead of US CPI

    EUR/USD heads into the new week caught between a Federal Reserve that is in no hurry to cut and a European Central Bank that has signalled it is close to the end of its easing cycle. That tug-of-war has kept the pair inside a well-defined range, and the range edges are where the trading opportunities are.

    What’s driving the pair

    • Rate differentials: two-year US–German yield spreads have narrowed, which normally supports the euro.
    • US data: Thursday’s CPI print is the week’s main event. A hot core reading would revive the dollar quickly.
    • Positioning: speculative euro longs are elevated, which leaves the pair vulnerable to a sharp washout on any hawkish surprise.

    Technical picture

    On the daily chart price is holding above the 50-day moving average, with the 200-day sloping gently higher underneath. Momentum (RSI 14) is neutral around 55, so there is no overbought signal yet. A daily close above the top of the range would open the way to the year’s highs; failure there keeps the range intact.

    Our bias: buy dips toward range support with a stop below the 50-day MA, targeting the range top. We step aside if US CPI comes in two tenths or more above consensus.

    Key events this week (SAST)

    • Tuesday 11:00: German ZEW economic sentiment
    • Thursday 14:30: US CPI (Sep)
    • Friday 16:00: University of Michigan sentiment (prelim)

  • USD/ZAR Outlook: Can the Rand Hold Its Gains?

    The rand has been one of the better-performing emerging-market currencies this quarter, helped by a softer dollar, firm precious-metals prices and improving sentiment around domestic reform. But USD/ZAR remains a high-beta pair: when global risk appetite turns, the rand is usually first out of the door.

    Supportive factors

    • Gold and platinum strength improving the terms of trade
    • Attractive carry: South African real rates remain among the highest in the G20 emerging-market group
    • Steadier electricity supply supporting growth forecasts

    Risks to watch

    • A risk-off shock in US equities, which typically lifts USD/ZAR sharply
    • Fiscal slippage ahead of the Medium-Term Budget Policy Statement
    • A surprise dovish turn from the SARB narrowing the carry advantage

    How we’re trading it

    We favour selling USD/ZAR rallies into resistance rather than chasing the rand at current levels. Remember that ZAR pairs have wider spreads and larger daily ranges than the majors, so size positions accordingly. On a Standard account the typical USD/ZAR spread is 65 points, compared with 30 on Raw ECN.

    Rule of thumb: halve your normal position size on USD/ZAR versus EUR/USD to keep the same rand risk per trade.

  • Gold: Buying the Dips in a Structural Bull Market

    Gold continues to attract buyers on every meaningful dip, supported by persistent central-bank purchases and lingering geopolitical uncertainty. The question for traders is no longer whether the trend is up, but how to join it without buying the top of a spike.

    Three drivers behind the rally

    • Central-bank demand: official-sector buying remains well above its pre-2022 average.
    • Real yields: falling inflation-adjusted US yields reduce the opportunity cost of holding a non-yielding asset.
    • Hedging demand: investors are using gold as portfolio insurance against equity and currency volatility.

    Trading gold on a CFD account

    One standard lot of XAU/USD equals 100 troy ounces, so a $1 move is worth $100 per lot. That is a lot of exposure for a small account. Most of our clients trade gold in 0.01 to 0.10 lot sizes and use a wider stop than on currency pairs, because gold’s average daily range is far larger in percentage terms.

    Strategy: wait for pullbacks to the rising 20-day moving average and look for a bullish reversal candle before entering. Avoid opening new positions in the hour before major US data.