• USD/ZAR slipped lower on Thursday after the central bank raised interest rates and April producer inflation accelerated sharply.
· The South African Reserve Bank raised its policy rate by 25 basis points to 7%, marking its first rate hike in three years.
· The move makes South Africa one of the few emerging markets to tighten monetary policy during the Iran war.
· The central bank said the hike was needed to steer inflation back to target after a sharp rise in April..
· Data on Thursday showed producer inflation accelerated sharply to 4.8% year-on-year in April from 2.3% in March.
• Immediate resistance is located at 16.490 (50%fib), any close above will push the pair towards 16.809(61.8%fib).
• Strong support is seen at 16.193(38.2%fib) and break below could take the pair towards 16.124(LowerBB).
Recommendation: Good to sell around 16.250 with stop loss of 16.550 and target price of 16.000
