The USD/ZAR currency pair dropped to approximately 18.933, which is in close proximity to the 20-day Simple Moving Average (SMA).

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• USD/ZAR declined towards 18.933, near the 20-day SMA.

The pair currently trades last at 18.9173.

The previous day high was 19.0902 while the previous day low was 18.9346. The daily 38.2% Fib levels comes at 18.9941, expected to provide resistance. Similarly, the daily 61.8% fib level is at 19.0308, expected to provide resistance.

In Tuesday’s session, the USD/ZAR faced some selling pressure and declined to 18.933, down by 0.25%, and seems to be on its way to retest the 20-day Simple Moving Average at 18.880.

All eyes are on Wednesday. South Africa reports the August Consumer Price Index (CPI) with the headline figure expected to increase slightly to 4.8% YoY, while the core inflation rate is anticipated to remain stable at 4.7% YoY. Retail Sales from July are expected to come in at -1.0% YoY, compared to the 0.9% YoY decrease in June. Regarding the South African Reserve Bank meeting on Thursday, the decision will likely be to maintain its interest rates at 8.25% despite some previous expectations of a hike. As for now, for the next twelve years, markets aren’t foreseeing any hikes and discounts that the bank will maintain rates at 8.25%.

On the Fed’s side, Markets expect the bank to keep rates steady at 5.25-5.50%, but Chair Powell will likely show a hawkish tone and signal future rate hikes which could benefit the USD. Strong US economic performance, especially in services, and a mixed labour market suggest the Fed may leave room for one more hike to curb inflation risks.

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

Support levels: 18.880 (20-day SMA), 18.728 (100-day SMA). 18.500.

Resistance levels: 19.000, 19.050, 19.150.

Technical Levels: Supports and Resistances

USDZAR currently trading at 18.933 at the time of writing. Pair opened at 19.0018 and is trading with a change of -0.36 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 18.8827, 50 SMA 18.5785, 100 SMA @ 18.7397 and 200 SMA @ 18.2589.

The previous day high was 19.0902 while the previous day low was 18.9346. The daily 38.2% Fib levels comes at 18.9941, expected to provide resistance. Similarly, the daily 61.8% fib level is at 19.0308, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 18.9275, 18.8533, 18.7719
• Pivot resistance is noted at 19.0831, 19.1645, 19.2387

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