- The British pound is sloping down moderately, losing 0.08% amid risk sentiment in the market.
- In the evening session, the GBP / USD pair fell to a new low for the year at 1.3160 amid the imposition of COVID-19 restrictions in the UK.
- GBP / USD Price Forecast: Has a downside bias, but a breakout of 1.3256 could add upward pressure on the pair.
The pound sterling It is recovering from the lows of the year around 1.3160, trading at 1.3233 during the American session at the time of writing. Market sentiment is optimistic as positive news from the evening session on the effectiveness of the vaccine against the newly discovered Omicron strain shows that a third injection neutralizes the Omicron variant, as reported by laboratory studies conducted by two manufacturers of COVID-19 vaccines.
In the evening session, the GBP / USD pair fell as low as 1.3160, as reports on the imposition of new COVID-19 measures in the UK could be effective tomorrow. That, coupled with no progress in Brexit negotiations, has put a brake on the pair amid a decline in money market futures, which now expect the Bank of England (BoE) to keep rates unchanged, amid moderate expressions from BoE member Saunders on December 3. Saunders said there “could be particular advantages to waiting and seeing more evidence” of the impact of COVID-19 omicron.
GBP / USD Price Forecast: Technical Outlook
The 1-hour chart shows that the GBP / USD pair continues to head south as the simple hourly moving averages (SMAs) remain above the pair’s price. The fall to a new low for the year coincided with a fall in the Relative Strength Index (RSI) to 26, within oversold conditions, which drove a rebound that passed the December 7 low of 1.3209, although it stalled 15 pips below the daily central pivot point, which is at 1.3246.
However, GBP bulls would need to regain at least the 100 hourly SMA at 1.3256, which, once achieved, would expose crucial resistance areas to the upside. The first resistance would be the confluence of the 200 hourly simple moving average (SMA) and the daily pivot R1 around 1.3284, followed by the round figure 1.3300.
On the other hand, the first line of defense for the pound bulls would be the December 7 cycle low at 1.3209. A break of the latter could cause the pair to fall towards the confluence of the S2 daily pivot and the new yearly low at 1.3160, followed by the S3 daily pivot at 1.3124.
Additional technical levels