FxWirePro: USD/ZAR dips after weak U.S. producer price data

• USD/ZAR edged lower on  Wednesday as dollar dipped after weaker U.S. producer prices reinforced expectations of a Fed rate cut this month.

• The latest Labor Department release indicated that the Producer Price Index (PPI) for final demand contracted by 0.1% on a month-over-month basis, following a downwardly revised 0.7% surge in July.  

• Futures now price a 90% chance of a 25-bp Fed cut and 10% for 50 bps this month, versus 93% and 7% on Tuesday.

•South Africa-focused Investors showed little reaction stronger GDP data, with growth under 1% seen as sluggish amid structural challenges.

• Looking Ahead, attention will shift to South Africa's mining, manufacturing   and current account data   due on Thursday for further clues.

• Immediate resistance is located at 17.611(SMA 20), any close above will push the pair towards 17.781(38.2%fib).

• Strong support is seen at 17.412(23.6%fib) and break below could take the pair towards 17.356(Lower BB)

Recommendation: Good to sell  around 17.500 with stop loss of 17.600 and target price of 17.300