Shilling: Rangebound For The Moment

Having weakened in the final two weeks of 2009 due to local seasonal forex demands, the Kenyan shilling is edging higher, touching KES75.15/US$ at one point in early trading on January 5. Indeed, trading through three-month resistance at KES75.20/US$, the unit is threatening to upset the bearish technical pattern that has emerged since it began selling off in mid-November from its 14-month high of KES73.90/US$. However, given that the shilling has broken out of the broad uptrend in place since March 2009, and considering the uncertain fundamental backdrop, we see the unit range trading over the short term between KES76.00/US$ and KES74.00/US$. A break of the latter would potentially signal a new uptrend

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