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FxWirePro: USD/ZAR slips as SARB delivers surprise rate hike

• 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

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