• USD/ZAR strengthened on Friday as investors focused on next week's inflation data and the South African Reserve Bank's policy meeting, where the interest rate decision is expected to be a close call.
• Rand has remained under pressure for most of the week as escalating Middle East tensions dampened risk appetite, pushing it to its weakest level of the month.
• Traders are now awaiting June inflation data due on Wednesday for fresh clues on the South African Reserve Bank's next interest rate decision..
• Headline inflation rose to 4.5% year-on-year in May from 4.0% in April, but came in below market expectations of 4.7%.
•The central bank raised its main lending rate for the first time in three years at its previous meeting.
• Immediate resistance is located at 17.606 (50%fib), any close above will push the pair towards 16.657 (Higher BB).
• Strong support is seen at 16.334 (38.2%fib) and break below could take the pair towards 16.105 (Lower BB).
Recommendation: Good to sell around 16.550 with stop loss of 16.700 and target price of 16.400
