The rand-dollar exchange rate is about to form a so-called “death cross”, a technical pattern that suggests to some traders the South African currency is poised to weaken. A death cross occurs when a short-term moving average, usually the 50-day average, crosses above a long-term average, in this case the 200-day measure, which some traders see as a sell signal. The last time this pattern formed, in June 2018, the rand weakened as much as 12% in the subsequent three months. The rand has strengthened about 3.7% against the dollar since the beginning of April, the best performance out of 24 emerging-market currencies tracked by Bloomberg, amid the Federal Reserve’s dovish turn and signs of an economic revival in China, the country’s biggest trading partner. It slipped 0.1% to 13.9830 per dollar by 3.13pm in Johannesburg on Monday. But the South African currency’s fate may depend on the outcome of general elections on May 8, which are seen as a referendum of President Cyril Ramaphosa’s...
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