FxWirePro: USD/ZAR drops below 17.000 level, scope for further downside

•   USD/ZAR slipped lower  on Thursday  as   South African rand was propelled by investor optimism over the previous day's budget review and a weaker U.S. currency on global markets.

•  Financial markets responded positively to Finance Minister Enoch Godongwana's announcement of a lower inflation target on Wednesday, as well as his commitment to stabilise public debt in the mid-year budget review.

•South Africa lowered its inflation target to 3%, the first change in 25 years, aiming to curb inflation expectations and allow room for lower rates, Finance Minister Enoch Godongwana said.

• Godongwana, in a mid-year budget review, cut South Africa’s inflation target from the 3–6% range to 3%, following central bank governor Kganyago’s earlier signal to aim for the lower end.

• At GMT 09:20,the dollar was down 0.42% at 16.970 against South African rand .

• Immediate resistance is located at 17.104 (38.2%fib), any close above will push the pair towards 17.206(50%fib).

• Strong support is seen at 16.997 (23.6%fib) and break below could take the pair towards 16.912(Lower BB)

Recommendation: Good to sell around 17.000 with stop loss of 17.100 and target price of 16.800