South African Rand: Weakness resumes after SARB surprise – Societe Generale

Societe Generale analysts report USD/ZAR has broken above a multi-month descending trend line and reclaimed its 200-day moving average, suggesting renewed upside momentum. The South African Reserve Bank surprised markets by holding rates at 7.0%. Key support is seen at the 200-day moving average around 16.57/16.50, with upside targets at 16.92, 17.25 and 17.58/17.72.

Pair clears key resistance and 200-DMA

"The SARB surprised markets by leaving the policy rate unchanged at 7.0%, voting 4-2. The expectation was for a hike. USD/ZAR vaulted the 200dma at 16.5920 for the first time since early April in a 3sd move."

"Headline CPI rose to 5.0% yoy in June and core edged up to 4.1%, marking a fourth straight monthly increase from the 3% low in February."

"The bank revised its inflation forecast lower for 2026 but still sees it evolving above target through 2028. Governor Kganyago argued that the tightening of May is still feeding through and weak growth is a concern."

"USD/ZAR recently crossed a multi-month descending trend line and has now broken out of a small base."

"Previous rebound attempts since last year petered out around the 200-DMA and the pair has now reclaimed this MA, this suggests that upward momentum may be returning."

"Defence of the 200-DMA at 16.57/16.50 will be crucial for continuation of the uptrend."

"Late April high at 16.92 is first hurdle. A break above this could extend the up move towards March peak at 17.25 and projections near 17.58/17.72."