The pound to rand (GBPZAR) pair is up by more than 0.20% today as traders react to the upbeat services PMI data from the UK. The pair is trading at 21.2076, which is higher than the intraday low of 21.0595.
Upbeat UK services PMI data
The GBPZAR pair is reacting to the upbeat services PMI numbers from the United Kingdom and elsewhere in Europe. According to Markit, the services PMI in the UK rose to 47.1 from the previous 29.0. In the same month, the composite PMI rose to 47.7, which is evidence that the country’s economy is bouncing back.
Earlier in the week, data from Markit showed that the manufacturing PMI moved back to expansion territory. Also, the PMI data from Europe has been positive. The eurozone services PMI rose to 48.5 from the previous 30.5.
Better, the services activity is likely to improve as the UK moves closer to allow restaurants and bars to start to operate this weekend.
Another positive news from the UK is that investors are starting to price-in a potential Brexit deal. While little progress was made in this week’s meeting, analysts believe that the two sides will reach a deal in as talks accelerate. For example, analysts at ING believe that the two sides will sign a narrow deal in December as talks continue in the coming year.
Meanwhile, the picture is looking dark in South Africa. The country has confirmed more than 160,000 cases and the number of infections is rising every day. Therefore, traders are starting to believe that the gains made in May could be wiped out.
Pound to rand technical analysis
The pound to rand (GBPZAR) is trading at 21.2076. On the daily chart, this price is below the 50-day and 100-day exponential moving averages. It is also between the 50% and 38.2% Fibonacci retracement level on the daily chart. It is inside the channel that has been forming in the past few days, which is evidence that there is indecision in the market. Also, it is above the Ichimoku cloud.
That means that the outlook of the pound to rand pair is neutral for now. As such, the key levels to watch are the resistance level at 21.72, which is also the 50-day EMA. The support is at 20.95, which is also along the 50% retracement.
GBPZAR technical forecast