FxWirePro: USD/ZAR momentum strongly bearish despite pause in losses

• USD/ZAR initially dipped but recovered ground  on Wednesday   as traders cautiously assessed geopolitical developments.

·  Iran condemned U.S. strikes near the Strait of Hormuz on Tuesday as a “gross violation” of the existing ceasefire, while the United States defended the action as necessary defensive measures..

· The White House rejected Iranian state television reports claiming Tehran would resume normal shipping through the Strait of Hormuz within a month in exchange for a U.S. military withdrawal and the lifting of a naval blockade.

·Traders are awaiting Thursday’s PCE inflation figures for additional clues on the Fed’s next policy moves, as markets assess the monetary stance of new Chair Kevin Warsh..

· Meanwhile, the spotlight for local markets will be firmly on the South African Reserve Bank’s interest rate announcement.

• Immediate resistance is located at 16.421(May 26th high), any close above will push the pair towards 16.504(50%fib).

• Strong support is seen at 16.207(38.2%fib) and break below could take the pair towards 16.172(Lower BB).

Recommendation: Good to sell  around 16.450 with stop loss of 16.560 and target price of 16.370