Sunday, May 5, 2013

Trade Idea: Buy USD/ZAR

Okay, so for those of you here to make money and not analyze my philosophical musings, here's my idea to play the strong NFP data.  Buy USD/ZAR.  ZAR rallied on the news to make new multi-week highs against the dollar.  This appears to be the return of risk on, risk off sentiment that drove the Rand last summer.  When markets realized that South African fundamentals had deteriorated, ZAR sold off, plummetting on October 5th, despite the strong NFP data that day.  The Rand's recent rally seems to be driven entirely by post jobs euphoria.  As such, trader conviction should be light, and selling the news on the Rand looks like nice short-term play.  I jumped in around 8.93, and will target 9, though longterm I see USD/ZAR at 10.    

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