FxWirePro: USD/ZAR drops below 17.300 level, poised for further downside

• USD/ZAR dipped slightly on Monday as traders awaited this week’s South African data releases for further clues on the health of Africa’s largest economy.

• The releases include the leading business cycle indicator, which tracks forward-looking economic trends, the producer price index, a key measure of inflationary pressures, and the South African Reserve Bank’s quarterly bulletin.

•Economists polled by Reuters expect year-on-year producer inflation of 1.5% for August, unchanged from July.

• The rand has held steady since last week’s decision by the South African Reserve Bank (SARB) to keep its main lending rate unchanged at 7%   , reflecting a cautious policy stance even as consumer inflation remains broadly under control.

•The rand traded at 17.299 against the dollar   by 12:35 GMT, within touching distance of Friday's close.

• Immediate resistance is located at 17.492  (SMA20), any close above will push the pair towards 18.629 (38.2%fib).

• Strong support is seen at 17.217 (23.6%fib) and break below could take the pair towards 17.144 (Lower BB).

Recommendation: Good to sell around 17.350 with stop loss of 17.550 and target price of 17.100