USD/ZAR has eased after rebounding in the previous session. The rebound was fuelled by the strong US inflation data on Wednesday. According to the US Bureau of Labor Statistics, consumer prices rose by 0.8% in April compared to 0.6% in March and the forecasted 0.2% MoM. Notably, the number is the highest since 2009.
USD/ZAR had been on a downtrend amid better-than-expected numbers from South Africa’s manufacturing sector. For instance, Tuesday’s data showed that the country’s manufacturing production had risen by 4.6% in March YoY compared to the forecasted 0.45%. Notably, progress in South Africa’s jab program has helped control the disease and its economic impacts in the country.
Besides, the difference in interest rates in the US and South Africa has benefited the latter’s industrial sector. In today’s session, the focus will be on the US PPI data. The pair will also be reacting to South African data on business confidence and mining production.
USDZAR Technical Outlook
On Wednesday, USD/ZAR rose from an intraday low of 13.9544 to 14.1357. The price movement was a reaction to the strong US inflation data. on a two-hour chart, it is trading above the 25 and 50-day exponential moving averages. At the current 14.1145, it is finding support along the 50-day EMA at 14.1000.
As investors await Thursday’s US PPI and Friday’s US retail sales data, I expect USD/ZAR to surge higher to 14.2000. On the flip side, the bears may manage to push the prices back to the psychological 14.0000.
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USD/ZAR Chart
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