USD/ZAR seesaws below $16.00 on mixed Omicron updates, US NFP eyed

• USD/ZAR picks up bids to pare intraday losses.
• South African Health Minister Phaahla says fourth wave can be managed, Top Epidemiologist Groome sounds worrisome.
• Yields stay pressured amid-NFP caution, contrasting catalysts and a light calendar in Asia.

USD/ZAR traders struggle for a clear direction below $16.00, consolidating the previous day’s losses around $15.95 during early Friday morning in Europe.

The South African currency (ZAR) pair dropped the previous day amid hopes of finding a cure to the native variant of the coronavirus, backed by the UK’s approval to SOTOVIMAB trials. However, the recent comments from Health Minister Joseph Phaahla and Top Epidemiologist Michelle Groome add to the market’s confusion during the generally observed pre-NFP trading lull.

Earlier in the day, South African Health Minister Phaahla said, per Reuters, “on Friday the country was entering its fourth wave of COVID-19 infections due to the Omicron variant, but hospitals were not under threat at this stage.” “Infections with the new variant were now present in seven out of the country's nine provinces, and hoped that the variant could be managed without causing too many deaths,” added Phaahla.

Alternatively, the nation’s top scientist Groome said, “We are seeing an unprecedented rise in new cases in a short time.” Adding to the worrisome comments, the South African Epidemiologist said, “Reproductive number associated with omicron is very high in Gauteng province at over 2, highest ever since start of pandemic.”

On the other hand, US Treasury yields bounced off a 10-week low the previous day on hawkish Fedspeak and firmer job-linked data. However, the Senate’s ability to avoid the government shutdown and rising numbers of COVID-19 strain in the US seems to weigh on the bond coupons, as well as the US Dollar Index (DXY), of late.

Moving on, USD/ZAR traders will pay close attention to the Omicron updates and the US jobs report for fresh impulse. However, the bulls are likely to remain hopeful considering increasing odds of the Fed rate hike and South African virus woes.

Technical analysis

USD/ZAR moves are likely restricted between a three-week-old rising support line and a descending resistance trend line from November 26, respectively around $15.85 and $16.10.