• USD/ZAR edged higher Wednesday as the rand weakened despite stronger retail sales and stable inflation expectations as investors awaited the Fed’s rate decision.
• South African inflation expectations stabilised in Q3 after surging in the previous quarter amid the oil price shock from the Iran war..
• Separate data showed, South Africa’s retail sales jumped 3.4% y/y in July, up from a revised 1.1% rise in June and well above expectations for 0.9%.
• The Federal Reserve will announce its policy decision at 1800 GMT (2p.m. ET), followed by a press conference by Chair Kevin Warsh..
•Markets are pricing a 25-basis-point Fed rate hike to 3.75%-4%, with policymakers expected to signal further tightening ahead.
• Immediate resistance is located at 16.284(Higher BB), any close above will push the pair towards 16.369(50%fib).
• Strong support is seen at 16.159(38.2%fib) and break below could take the pair towards 16.080(SMA 20)
Recommendation: Good to buy 16.250 with stop loss of 16.000 and target price of 16.400
