The pound to rand (GBPZAR) pair is up by more than 50 basis points as traders continue to worry about the surging number of coronavirus cases in South Africa. The pair is trading at 21.2975 at 07:00 GMT. This price is slightly above the day’s low of 21.2218.
South Africa coronavirus cases turning worse
The number of coronavirus cases in South Africa is soaring as the country continues to reopen. According to the health ministry, the number of cases confirmed yesterday rose to a record high of 13,674. That was the highest number on record. It passed the previous record of 10,853 that was recorded on July 4.
The surge in cases has also been accompanied by a rising number of deaths. The country has recorded more than 3,720 deaths, which is a higher number than the 705 that were recorded on June 1.
At the same time, the health sector in the country is getting out of hand. According to Bloomberg, intensive care facilities are expected to run out in all provinces. Also, most hospitals have been struggling with high patient loads and loss of employees who have contracted the disease. In a statement, an official said:
“There are signs that the health care system is collapsing both in the public and private sector. There isn’t any management or leadership from the side of the hospitals. We’re very worried.”
Meanwhile, the pound to rand pair has risen because of the overall optimism about Brexit. With talks ongoing, analysts believe that Boris Johnson will not have a chance but to either seek an extension or to make compromises. That is because the UK has more to lose if the country leaves the EU without a deal.
Pound to rand technical outlook
The GBPZAR pair rose slightly today after falling sharply yesterday. The pair still remains at a narrow range of between 21.0 and 21.80. Also, the price is slightly below the 50-day and 100-day exponential moving averages. It is also slightly below the 38.2% Fibonacci retracement level.
Therefore, the outlook for the metal is now neutral because it could break out in either direction. The levels to watch will be the support at 21.0 and the resistance at 21.80.