• USD/ZAR strengthened on Wednesday as stronger dollar offset better-than expected domestic inflation and retail sales data.
• The greenback firmed as investors awaited the Federal Reserve’s rate decision, with policymakers widely expected to keep rates unchanged.
• South Africa’s annual inflation eased to 3% in February, hitting the central bank’s target, though analysts warn the slowdown may be temporary due to inflation risks from the ongoing Middle East conflict.
• South Africa's retail sales data showed a 4.2% year on year increase in January compared to the 2.5% predicted by economists.
•Like other risk-sensitive currencies, the rand often takes its cue from global drivers such as U.S. policy.
• Immediate resistance is located at 16.830 (38.2%fib), any close above will push the pair towards 17.135(23.6%fib).
• Strong support is seen at 16.555(50%fib) and break below could take the pair towards 16.356(SMA 20)
Recommendation: Good to buy around 16.800 with stop loss of 16.600 and target price of 17.100
