ZARUSD – South African Rand

The price history of the ZARUSD illustrates another commodity related currency. We recently updated the other two commodity currencies we track: the AUD and the CAD. Of these three currencies the ZAR shows displays a massive devaluation against the USD since it began trading in 1971. A decline from $1.50 in 1971 to $0.073 in 2001. Its Supercycle bear market began, however, in 1980 at the last commodity bull market peak. And, it bottomed at the last commodity bear market low in 2001. Naturally we are expecting the ZARUSD will peak again at the next commodity bull market peak in 2014.

The ZARUSD bull market is unfolding in the typical three Cycle waves. Cycle wave [A] rose from ZAR 0.73 in 2001 to 0.176 in 2004. This was followed by Cycle wave [B] into the ZAR 0.85 low in 2008. Cycle wave [C] has been underway since then.

Typically currency Cycle waves unfold in three Primary waves: ABC. We observed this in the ZAR during Cycle wave [A] and Cycle wave [B]. Therefore we are expecting this pattern again in Cycle wave [C].

The ZAR weekly chart displays most of the three Primary waves of Cycle wave [B]. From that low we have counted a quadruple zigzag into the recnet ZAR 0.151 high. We tentatively labeled that high Primary wave A. The decline that followed was the biggest decline since Cycle [C] began, i.e. ZAR 0.151 to 0.136. We’re counting this decline as Major wave A of Primary wave B. The current uptrend should be Major wave B.

When the uptrend ends the ZAR should enter Major wave C and conclude with a lower low. After that Primary wave C should begin and carry the ZAR into a 2014 bull market top. Currently we’re expecting a bull market high around ZAR 0.20 in 2014. At that level Cycle wave [C] = Cycle wave [A]. If you would like to track the ZARUSD with us just scroll down the page using the following link: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987&cmd=show[s113312965]&disp=O. Best to your investing/trading!

About tony caldaro

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3 Responses to ZARUSD – South African Rand

  1. Pingback: Foreign currency and USD update | the ELLIOTT WAVE lives on

  2. ljjmartin says:

    Hi Tony –
    Thank you very much for the USDZAR analysis.
    I’m especially appreciative because your use of quadruple zigzags may clear up a difficulty I have had for a number of years trying to fit an impulse count into currency crosses when a qzz fits instead. I recall a similar situation where I was convinced that the only way to label some first waves in TBonds was to use an expanding diagonal. At the time this was heresy for the EWI camp but eventually they had to come round (though I claim no credit for that). As far as I knowEWI will not acknowledge as correct anything over three zigzag subwaves and I do not think they see forex crosses in the same way you do, i.e. a series of three waves up alternating with three waves down. This may explain why they were looking for a wave four triangle and a thrust above the Jan 2002 high in USDCAD.

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    • tony caldaro says:

      Hi Leslie, OEW confirms the waves, we just try to anticipate them and label them as they unfold. Currencies rarely go impulsive unless there is a strong collapse in one of the pairs. Happy to have helped clear your counts.

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