JSE Weekly Forecast: Top 40 Eyes Breakout as Budget Surplus Lifts Sentiment

Quick overview

The JSE Top 40 Index is consolidating near ZAR 88,094 as price action tightens into a symmetrical triangle. With rising support around ZAR 87,584 and resistance at ZAR 88,839, this setup often signals a potential breakout, although the direction remains unclear.

• Support Levels: 87,584 → 86,607 → 85,793
• Resistance Zones: 88,839 → 89,573 → 90,419

The 50-period EMA (ZAR 87,712) is acting as a technical pivot, keeping prices grounded. Meanwhile, MACD histogram bars have flipped positive, and the signal lines are starting to flatten—typically an early sign that momentum may be shifting to the upside.

From what I often see with this setup, it’s the breakout confirmation—especially with volume—that tells the real story. For now, the JSE Top 40 remains coiled inside this tightening range.

South Africa’s Budget Surplus Shifts the Mood

On the macro side, there’s reason for optimism. South Africa just posted its first consecutive primary budget surplus in 16 years, with a R48.9 billion gain—equivalent to 0.7% of GDP. That’s a big deal.

• Revenue hit R1.8 trillion for FY 2025, driven by stronger tax compliance and improved collections.
• Debt servicing now eats 22% of every rand, but that’s expected to ease if the surplus trend holds.

This surplus helps reduce the government’s borrowing needs and adds some confidence to both the rand and domestic equities. Still, it’s not all smooth sailing.

The rand has been jumpy—briefly strengthening to 17.68/USD after rumors that Donald Trump might replace Fed Chair Powell. But stronger-than-expected U.S. inflation data reversed those gains, with the dollar surging back and putting pressure on emerging market currencies.

Key Catalysts to Watch This Week

While the JSE All Share Index trades near ZAR 95,862, this week could bring more volatility from both global and local developments:

U.S. data to watch:

• ISM Manufacturing PMI
• JOLTS, ADP & Nonfarm Payrolls

Local events:

• Fallout from the dismissal of South Africa’s deputy trade minister
• Key earnings from JSE giants like Naspers

All of this could shift sentiment quickly—especially in a market sitting on a breakout edge.

Trade Setup: Breakout Imminent?

Bullish Setup:

• Entry: Long above 88,900
• Target: 89,573 → 90,419
• Stop-loss: Below 88,000

Bearish Setup:

• Entry: Short below 87,500
• Target: 86,607 → 85,793
• Stop-loss: Above 88,000

The JSE Top 40 is sitting at a technical crossroads, with solid macro support from the budget surplus but plenty of global uncertainty ahead. Until we see a confirmed breakout with strong follow-through, the index may continue to trade sideways within its tightening triangle.

ABOUT THE AUTHOR See More

Arslan Butt

Lead Markets Analyst – Multi-Asset (FX, Commodities, Crypto)

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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