• USD/ZAR edged lower on Wednesday as the South African rand strengthened after hotter-than-expected inflation data reinforced expectations of another interest rate hike, with investors awaiting the central bank's policy decision.
• Annual headline consumer inflation accelerated to a two-year high of 5.0% in June from 4.5% in May, reinforcing expectations that the central bank will deliver a second straight interest rate hike on Thursday.
• The South African Reserve Bank, which targets 3% inflation, is widely expected to announce its next interest rate decision on Thursday.
• Separate data showed South African retail sales rose 2.3% year-on-year in May, after a revised 1.2% increase in April.
• Immediate resistance is located at 16.553(50%fib) any close above will push the pair towards 16.601(Higher BB).
• Strong support is seen at 16.360(SMA 20) and break below could take the pair towards 16.288(38.2%fib).
Recommendation: Good to sell around 16.400 with stop loss of 16.550 and target price of 16.200
