FxWirePro: USD/ZAR drifts lower, could be on verge of bigger drop

• USD/ZAR drifted lower  on Monday  as rand firmed  as markets digested fresh U.S.-China trade concerns and a ceasefire deal in the Middle East.

•On Friday, Trump unveiled 100% tariffs on U.S.-bound Chinese goods starting November 1, responding to China’s limits on critical mineral exports.

• After threatening 100% tariffs on Chinese goods effective November 1, Trump softened his stance over the weekend, saying that “everything will be fine” and that the U.S. does not wish to “hurt” China.

•The spotlight was on Gaza as a Trump-brokered ceasefire led to the release of seven Israeli hostages by Hamas, a significant step toward ending the region’s two-year war.

• Like other risk-sensitive currencies, the rand often takes cues from global drivers such as U.S. policy, geo politics  and economic data.

• Domestically-focused investors will look to a business confidence index, mining production   data and retail sales   figures this week for clues to the health of Africa's largest economy.

• Immediate resistance is located at 18.027  (38.2%fib), any close above will push the pair towards 18.207 (23.6%fib).

• Strong support is seen at 17.290 (38.2%fib) and break below could take the pair towards 17.116 (Lower BB).

Recommendation: Good to sell around 17.400 with stop loss of 17.850 and target price of 17.100