FxWirePro: USD/ZAR trends higher, but faces potential pitfalls

• USD/ZAR firmed on Wednesday as investors absorbed South Africa’s inflation data and looked ahead to the U.S. Federal Reserve’s interest rate decision later in the day.

•  Attention remains on the Fed’s two-day meeting later today, with policymakers expected to keep interest rates unchanged.

•  Statistics South Africa reported on Wednesday that consumer price inflation held steady at 2.8% in May, unchanged from April..

•  At GMT 11:20, the  dollar was trading up 0.57% at 18.117 against South African rand.

• Technical signals are  strongly bearish as RSI is   at 49, daily momentum studies  14,11 and 21 DMAs are trending down.

• Immediate resistance is located at 18.005(38.2%fib), any close above will push the pair towards 18.054(Higher BB).

• Strong support is seen at 17.701(23.6%fib) and break below could take the pair towards 17.591(Lower BB)

Recommendation: Good to sell  around 18.150 with stop loss of 18.400 and target price of 17.500