FxWirePro: USD/ZAR extends gains, potential for bullish continuation

• USD/ZAR strengthened on Monday after data showed South African factory activity slumped in August.

• South African manufacturing activity declined sharply in August, reversing the gains from the previous month and signaling highly volatile business conditions, according to a Purchasing Managers' Index (PMI) survey released on Monday.

•The seasonally adjusted PMI for the factory sector fell to 43.6 points in August from 52.4 in July, dropping well below the 50-point threshold that indicates growth.

• Looking ahead, investors will closely monitor the South Africa’s second-quarter GDP figures, set to be released at 0930 GMT on Tuesday, for insights into the health of Africa’s largest economy.

• Immediate resistance is located at 17.863  (38.2%fib), any close above will push the pair towards 18.080 (50%fib).

• Strong support is seen at 17.710(Daily low) and break below could take the pair towards 17.5900 (23.6%fib).

Recommendation: Good to buy around 17.9700 with stop loss of 17.4000 and target price of 18.1000