This Indicator Makes Rand a Buy, But Not Many Are Heeding It
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A key technical indicator shows the rand is further into oversold territory than it’s been at any time in the past two-and-a-half years. That counts for little amidst an emerging-market sell-off that’s seen South Africa’s currency plunge to its weakest level since November.
The dollar-rand 14-day relative strength index rose above 78 on Tuesday to its highest level since January 2016. Many technical traders view anything above 70 as a sign that the dollar is overbought and due for a correction. It’s been above that threshold since Thursday, but the rand’s showing no sign of turning, having lost 3.3 percent against the dollar this week alone.