• USD/ZAR rose Wednesday as the rand weakened after U.S. inflation data for February met expectations, while markets stayed focused on the Middle East amid rising oil price concerns.
• Data from the U.S. Department of Labor showed the Consumer Price Index rose 0.3% in February, matching forecasts and up from January’s 0.2%, while annual CPI held at 2.4% and core inflation came in at 2.5%, also in line with expectations.
• Oil prices rebounded Wednesday as markets questioned whether the International Energy Agency’s plan for a record reserve release could offset potential supply shocks.
• The rand has been under pressure recently, falling more than 3% last week amid global risk aversion and rising oil prices, which are particularly negative for South Africa as a net energy importer.
•Like other risk-sensitive currencies, the rand often takes cues from global drivers, in addition to domestic economic data.
• Immediate resistance is located at 16.577(50%fib), any close above will push the pair towards 16.709(Higher BB).
• Strong support is seen at 16.207(38.2%fib) and break below could take the pair towards 16.131(SMA 20)
Recommendation: Good to buy around 16.400 with stop loss of 16.200 and target price of 16.700
