FxWirePro: USD/ZAR under pressure after early buying dries up

• USD/ZAR initially gained on Thursday as but gave ground as investors  geared up for interest rate decision by the South African Reserve Bank.

• The South African Reserve Bank will announce its rate decision later today, with economists widely expecting it to keep the main lending rate steady at 7.00%.

• South Africa’s central bank faces easing headline inflation after August’s drop in fuel and food costs, but sticky expectations keep forecasts pointing to 4.2% by end-2025. With a 3% target and a weaker rand raising import-driven risks, the Reserve Bank remains cautious on rate cuts.

• Headline inflation in Africa’s most industrialised economy slowed unexpectedly in August, led by weaker fuel and food prices.

• The rand, like other risk-sensitive currencies, often takes cues from drivers such as U.S. policy , geopolitical events and domestic drivers.

• Immediate resistance is located at 17.520(SMA 20), any close above will push the pair towards 17.570(38.2%fib).

• Strong support is seen at 17.266(23.6%fib) and break below could take the pair towards 17.182(Lower BB)

Recommendation: Good to sell  around 17.350 with stop loss of 17.600 and target price of 17.150