FxWirePro: USD/ZAR neutral in the near term, scope for downward resumption

• The USD/ZAR traded in narrow range   on Monday  as markets awaited the Fed’s minutes this week for clues about the interest rate outlook..

• Federal Reserve Chair Kevin Warsh has offered few clues on future policy, saying only last week that markets expecting the Fed to become lenient on inflation, despite its recent moderation, could be disappointed.”

• In the absence of key local economic data, the South African rand is likely to be driven by external factors, including U.S. macroeconomic data and policy developments.

 • The domestic economic calendar is relatively quiet this week, with June foreign reserves data due on Tuesday and May manufacturing output scheduled for release on Thursday.

• Immediate resistance is located at 16.367 (SMA 20), any close above will push the pair towards 16.487. (SMA20).

• Strong support is seen at 16.184(38.2%fib) and break below could take the pair towards 16.080(Lower BB)

Recommendation: Good to sell around 16.300 with stop loss of 16.400  and target price of 16.100