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FxWirePro: USD/ZAR neutral in the near-term, scope for downward resumption

• USD/ZAR traded flat on Thursday as investors assessed November producer inflation data for clues on the health of Africa’s largest economy.

• Producer inflation rose 2.9% year on year in November, unchanged from October, data from the statistics agency showed, while producer prices were flat on a monthly basis..

• Inflation has remained under control this year, enabling the South African Reserve Bank to lower its benchmark interest rate four times. At its most recent policy meeting, the central bank reduced rates by 25 basis points, pointing to an improved inflation outlook.

• Its next policy decision is due on January 29, with analysts expecting additional rate cuts in 2026.

• Immediate resistance is located at 16.904(38.2%fib), any close above will push the pair towards 17.038(SMA 20).

• Strong support is seen at 16.704 (23.6%fib) and break below could take the pair towards 16.551(Lower BB)

Recommendation: Good to   sell 16.800 with stop loss of 17.000 and target price of 16.650

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