Uncertainty Reigns as Rand Weakens on Election Results

The South African Rand (ZAR) is under significant pressure following the country’s general election on Wednesday. Early results suggest the ruling African National Congress (ANC) may lose its parliamentary majority for the first time since gaining power in 1994. While the ANC is still expected to be the largest party, falling below 50% would necessitate forming a coalition government, potentially with populist parties advocating for nationalization policies. This scenario has spooked investors, leading to a Rand sell-off. 

Adding to the uncertainty is the upcoming South African Reserve Bank (SARB) interest rate decision later today. The central bank is expected to maintain its current stance in the fight against inflation, but the political turmoil might influence its decision-making. Overall, market sentiment towards the Rand is negative due to the uncertain political landscape and potential for policy shifts. 

Technical Analysis 

The USDZAR price currently sits at R18.65511. The recent surge broke above the 20-SMA (green), 50-SMA (blue), and 100-SMA (orange), indicating a potential upward trend. The 20-SMA trading slightly above the other two SMAs reinforces this bullish momentum. 

The Relative Strength Index (RSI) sits at 69.77, exceeding overbought territory. This suggests a potential retracement in the near future. If the uptrend persists, the initial resistance level lies at R18.83067, followed by R19.10360. 

However, a break below the crucial support level of R18.37285, backed by significant trading volume, could expose the Rand to further depreciation. This bearish scenario might target R18.17208 and even R18.02689 in the short term. 


The USDZAR price action reflects the current uncertainty in South Africa. While a technical uptrend is underway, the overbought RSI reading indicates a possible correction. The outcome of the ongoing vote count and the SARB’s interest rate decision will be crucial in determining Rand’s future trajectory.   

Sources: TradingView, Trading Economics, Reuters, Dow Jones Newswire, MT Newswire. 

Piece written by Mfanafuthi Mhlongo, Trive Financial Market Analyst 

Disclaimer: Trive South Africa (Pty) Ltd (hereinafter referred to as “Trive SA”), with registration number 2005/011130/07, is an authorised Financial Services Provider in terms of the Financial Advisory and Intermediary Services Act, 37 of 2002. Trive SA is authorised and regulated by the South African Financial Sector Conduct Authority (FSCA) and holds FSP number 27231. Trive Financial Services Ltd (hereinafter referred to as “Trive MU”) holds an Investment Dealer (Full-Service Dealer, excluding Underwriting) Licence with licence number GB21026295 pursuant to section 29 of the Securities Act 2005, Rule 4 of the Securities Rules 2007, and the Financial Services Rules 2008. Trive MU is authorized and regulated by the Mauritius Financial Services Commission (FSC) and holds Global Business Licence number GB21026295 under Section 72(6) of the Financial Services Act. Trive SA and Trive MU are collectively known and referred to as “Trive Africa”.

Market and economic conditions are subject to sudden change which may have a material impact on the outcome of financial instruments and may not be suitable for all investors. Trive Africa and its employees assume no liability for any loss or damage (direct, indirect, consequential, or inconsequential) that may be suffered. Please consider the risks involved before you trade or invest. All trades on the Trive Africa platform are subject to the legal terms and conditions to which you agree to be bound. Brand Logos are owned by the respective companies and not by Trive Africa. The use of a company’s brand logo does not represent an endorsement of Trive Africa by the company, nor an endorsement of the company by Trive Africa, nor does it necessarily imply any contractual relationship. Images are for illustrative purposes only and past performance is not necessarily an indication of future performance. No services are offered to stateless persons, persons under the age of 18 years, persons and/or residents of sanctioned countries or any other jurisdiction where the distribution of leveraged instruments is prohibited, and citizens of any state or country where it may be against the law of that country to trade with a South African and/or Mauritius based company and/or where the services are not made available by Trive Africa to hold an account with us. In any case, above all, it is your responsibility to avoid contravening any legislation in the country from where you are at the time.

CFDs and other margin products are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how these products work and whether you can afford to take the high risk of losing your money. Professional clients can lose more than they deposit. See our full Risk Disclosure and Terms of Business for further details. Some or all of the services and products are not offered to citizens or residents of certain jurisdictions where international sanctions or local regulatory requirements restrict or prohibit them.