FxWirePro: USD/ZAR gains upside momentum as bulls take charge

• USD/ZAR strengthened on Monday as the South African rand weakened, pressured by a firmer U.S. dollar and rising oil prices amid escalating U.S.-Iran tensions.

• Tehran said it had forced a U.S. warship to turn back from the Strait of Hormuz, although U.S. Central Command swiftly denied reports by Iran’s semi-official Fars news agency that two missiles had struck the vessel..

• The rand has remained highly sensitive to global market sentiment since the United States and Israel launched strikes on Iran in late February, prompting retaliation from Tehran..

• South African manufacturing sentiment improved in April as output and new orders rebounded following a weak first quarter

•Separately, data from South Africa’s auto association NAAMSA showed new vehicle sales rose 13% year-on-year in April, slowing from a 17.3% increase in March..

• Immediate resistance is located at 16.877(38.2%fib), any close above will push the pair towards 17.000 (Psychological level).

• Strong support is seen at 16.576(50%fib) and break below could take the pair towards 16.497(SMA20).

Recommendation: Good to by around 16.800 with stop loss of 16.500 and target price of 17.200