FxWirePro: USD/ZAR cedes early gains ,outlook bearish

•  USD/ZAR retreated   on Friday   as markets digested the South African Reserve Bankinterest rate hike.

• South Africa’s central bank raised its benchmark interest rate by 25 basis points to 7.25%, marking its second rate increase this year, as higher fuel costs and persistent services inflation added to price pressures..

• All six members of the Monetary Policy Committee supported the 25-basis-point rate increase, in line with expectations from most economists.

•Next week, domestic investors will focus on a raft of month-end economic data, including money supply, private-sector credit, the trade balance and budget balance, along with producer inflation and second-quarter formal-sector employment figures.

• Like other risk-sensitive currencies, the rand has ​been driven by global market sentiment, particularly since the ​start of the U.S.-Iran war on February 28, alongside domestic economic developments.

• Immediate resistance is located at 16.442(Daily high), any close above will push the pair towards 16.496(50%fib).

• Strong support is seen at 16.245(38.2%fib) and break below could take the pair towards 16.173(SMA 20).

Recommendation: Good to sell around 16.300 with stop loss of 16.500 and target price of 16.100