FxWirePro: USD/ZAR retreats slightly but outlook is bullish

• USD/ZAR retreated slightly on Monday as investors turned cautious ahead of domestic inflation data that is expected to reflect the impact of rising prices linked to the ongoing war in the Middle East.

·  Statistics South Africa will release April inflation data on Wednesday, with analysts polled by Reuters expecting it to accelerate to 3.9% year on year, up from 3.1% in March..

· The statistics agency will also publish retail sales data on Wednesday, though analysts say the March figures are unlikely to show weakness as they predate the full escalation of the Iran war.

·Investors are also watching as the Group of Seven finance ministers and central bankers meet in Paris on Monday and Tuesday to discuss how to bring a lasting end to the war in Iran

· Like other risk-sensitive currencies, the rand often takes cues from global drivers. It has been at the mercy of global market sentiment since the start of the U.S.-Israeli war with Iran at the end of February.

• Immediate resistance is located at 16.820 (Higher BB), any close above will push the pair towards 16.892(38.2%fib).

• Strong support is seen at 16.643 (50%fib) and break below could take the pair towards 16.554(SMA 20).

Recommendation: Good to buy  around 16.650 with stop loss of 16.400 and target price of 16.800