FxWirePro: USD/ZAR hits six month low, vulnerable to further losses

• USD/ZAR dropped to a six-month low on Thursday as upbeat south African economic data and weaker greenback boosted rand.

•  US. dollar weakened in response to U.S. President Donald Trump's comments on replacing Federal Reserve Chair Jerome Powell sparked concerns regarding the independence of the central bank.          .

•  Trump has repeatedly pushed for rate cuts to spur growth, while Powell has remained cautious, citing risks from the President’s tariff policies.

•On the data front,South Africa registered foreign direct investment (FDI) inflows of 11.7 billion rand ($661.46 million) in Q1 2025, up from 7.5 billion rand in the previous quarter, according to central bank data released on Thursday.

•  The South African Reserve Bank (SARB) stated in its Quarterly Bulletin that the rise in foreign direct investment was driven by non-resident parent companies boosting their equity holdings in local subsidiaries.

• Technical signals are  strongly bearish as RSI is   at 39, daily momentum studies  5,9 and 11 DMAs are trending down.

• Immediate resistance is located at 17.812(SMA 20), any close above will push the pair towards 17.905 (38.2%fib).

• Strong support is seen at 17.562(23.6%fib) and break below could take the pair towards 17.478(Lower BB)

Recommendation: Good to sell  around 17.750 with stop loss of 18.500 and target price of 17.200