Overall, HSBC forecasts continued strengthening in the rand toward 6.75 by the end of third quarter. Weakness is seen into early 2008, with a firstquarter forecast of 7.25.
“I’m looking for a technical break of the support the currency pair is currently trading at, around the 6.8606 (the May 8 low),” Lee says. “If this level is broken, I would be looking to initiate a long around that area with targets set at 6.4050, just below the 6.427, 76.4-percent Fibonacci retracement of the 5.9446-7.983 bull wave.”
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