The GBP/ZAR has reversed the earlier lows of the day and is now up 0.09% as risk aversion hits emerging market currency pairs. The South African Rand has been on the back foot against western currencies as fears of a global recession drive investors away from riskier emerging-market assets.
A rise in the latest PMI data from the United Kingdom helped to make the Pound firmer this Tuesday. Services and Composite PMI data came in at 54.3 and 53.7, respectively, which beat the previous figures and market expectations of 53.4 and 53.1, respectively.
30-Year Gilts also saw higher yields from the last auction, coming in at 2.531% (versus 2.04% previously) to make the Pound more attractive to investors seeking fixed income returns. The rest of the week’s calendar for the two currencies will be uneventful. This allows technical setups to dominate market action for the week.
GBP/ZAR Forecast
The breakout from the triangle as predicted last week has occurred, but it has stalled at the 19.89212 resistance, the site of the 17 May to 26 May confluence of candle highs. The bulls must uncap this level to continue the advance, targeting 20.11601 initially. Only when this new resistance is breached can the bulls aim for the 20.35410 resistance target. 20.71491 lies ahead, forming an additional northbound target.
On the flip side, a decline below the current support level at 19.68257 allows for a further dip to locate the 19.37222 pivot (highs of 5 May and 24 June 2022). Additional pivots to the south are found at the 15 June low at 19.15202 and at the 15 April/9 June lows located at 19.00515. There is also an intervening support level at 18.79264 (13 April 2022 low) before the 18.41730 support (8 January 2020 low) becomes visible.
GBP/ZAR: Daily Chart
