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USD/ZAR Price Analysis: Bulls lose steam ahead of Fed decision and South African data

  • USD/ZAR fell towards 18,933, near the 20-day SMA.
  • South Africa reports inflation figures for August and retail sales for July on Wednesday.
  • The Federal Reserve (Fed) is expected to pause but leave the door open for further increases.

In Tuesday’s session, the USD/ZAR faced some selling pressure and dropped to 18.933, losing 0.25%, and appears to be on track to retest the 20-day SMA at 18.880.

All eyes are on Wednesday. South Africa reports the Consumer Price Index (CPI) for August, with the headline figure expected to rise slightly to 4.8% year-on-year, while the core inflation rate is expected to remain stable at 4.7% year-on-year. Retail sales for July are expected to be -1.0% year-on-year, compared to a decline of 0.9% year-on-year in June. Looking ahead to Thursday’s South African Reserve Bank meeting, the decision is likely to be to keep interest rates at 8.25%, despite some earlier expectations of a hike. At the moment, for the next twelve years, the markets do not foresee any increase and discount that the bank will maintain rates at 8.25%.

On the Fed side, markets expect the bank to keep rates steady at 5.25-5.50%, but Chairman Powell is likely to strike a hawkish tone and signal future rate hikes that could benefit the dollar. The strong performance of the US economy, especially in the services sector, and a mixed labor market suggest that the Fed could leave room for a further hike to curb inflation risks.

USD/ZAR Levels to watch

The daily chart shows signs of bullish exhaustion for USD/ZAR. The Relative Strength Index (RSI) indicates a neutral stance above its midline, showing a flat slope in positive territory, while the Moving Average Convergence (MACD) presents neutral red bars. In a broader picture, the pair is above the 20,100,200-day SMA, suggesting that the bears are struggling to challenge the overall uptrend.

Support Levels: 18,880 (20-day SMA), 18,728 (100-day SMA). 18,500.

Resistance levels: 19,000, 19,050, 19,150.

USD/ZAR Daily Chart


Latest price today 18,933
Today Daily Change -0.0688
Today’s daily variation -0.36
Today’s daily opening 19.0018
daily SMA20 18.8827
daily SMA50 18.5785
SMA100 daily 18.7397
SMA200 daily 18.2589
Previous daily high 19.0902
Previous daily low 18.9346
Previous weekly high 19.1283
Previous weekly low 18.7634
Previous Monthly High 19.2985
Previous monthly low 17.8264
Daily Fibonacci 38.2 18.9941
Fibonacci 61.8% daily 19.0308
Daily Pivot Point S1 18.9275
Daily Pivot Point S2 18.8533
Daily Pivot Point S3 18.7719
Daily Pivot Point R1 19.0831
Daily Pivot Point R2 19.1645
Daily Pivot Point R3 19.2387

Source: Fx Street

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