FxWirePro: USD/ZAR gains some upside momentum but still bearish

• The USD/ZAR inched higher on Tuesday as investors booked profits following Monday’s gains, which were driven by a surge in gold prices.

•The rand gained around 0.5% on Monday, buoyed by a sharp rise in gold, which surged over 2% to an all-time high as investors sought the safe-haven asset after the Trump administration launched a criminal probe into Federal Reserve Chair Jerome Powell.

• Like other risk-sensitive currencies, the rand is likely to be driven by global factors, including unrest in Iran and ongoing concerns over the Federal Reserve’s independence.

• Domestically, traders are keeping a close eye on talks around a potential extension of the U.S. trade preference scheme, AGOA.

• Immediate resistance is located at 16.571(SMA 20), any close above will push the pair towards 16.654(38.2%fib).

• Strong support is seen at 16.325 (23.6%fib) and break below could take the pair towards 16.240(Lower BB)

Recommendation: Good to sell around 16.500 with stop loss of 16.700 and target price of 16.200