FxWirePro: USD/ZAR gains some momentum heading into Fed rate decision

• USD/ZAR rebounded  on Wednesday   as greenback strengthened ahead of an expected U.S. Federal Reserve interest rate cut.

• The Federal Reserve is anticipated to reduce its benchmark interest rate by 25 basis points, bringing it to a range of 4.00%–4.25% at the conclusion of its monetary policy meeting.. 

• Beyond the rate decision, attention will center on Fed Chair Jerome Powell’s remarks regarding the future direction of U.S. monetary policy.

• Meanwhile, South Africa’s inflation unexpectedly slowed in August due to falling fuel and food prices, leading some analysts to speculate that the central bank may consider cutting interest rates on Thursday.

• Headline consumer inflation dropped to 3.3% year-on-year in August, down from 3.5% in July and below economists’ forecast of 3.6%.

• Looking ahead, South Africa will release July retail sales   figures at 1100 GMT, which will offer further clues on the health of Africa's most industrialised economy.

• Immediate resistance is located at 17.424  (38.2%fib), any close above will push the pair towards 17.526 (50%fib).

• Strong support is seen at 17.298(23.6%fib) and break below could take the pair towards 17.273 (Lower BB).

Recommendation: Good to sell around 17.430 with stop loss of 17.600 and target price of 17.200