GBP / USD moves firmly towards 1.3350

• The British pound is firmly up 0.60% on the day.
• Optimistic market sentiment and increased demand for risk-sensitive currencies like the GBP weigh on the US dollar.
• US consumer confidence improving at the fastest pace since July, GBP / USD gaining the most after the release.
• GBP / USD Technical Outlook: Targeting higher in the short term, but would face stiff resistance at 1.3374.

The British pound is rebounding during the American session on Wednesday, holding firm around the 1.3350 region and up 0.60% on the day at the time of writing. Market sentiment is optimistic, as evidenced by the European and US stock indices, which are trading positive, while the USD weakens across the board. In addition, US consumer confidence increased in December, above estimates.

Investor assessment of the Omicron variant slightly affected market sentiment ahead of the Wall Street open. However, in the last hour, equities rallied, while in the currency market, risk-sensitive currencies are heading higher, led by GBP. In addition, the positive news from South Africa, reporting that the current wave of contagion is 80% less likely to be hospitalized if people contract the Omicron strain, according to one study, improves appetite for risk.

The The Conference Board reported that consumer confidence in December rose to 115.8 points, above the 110.8 estimates. Since July, is the best brand before the Delta wave will weaken confidence in the third quarter. “Consumer confidence improved even more in December, after a very modest gain in November,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board.

Franco added that “in the meantime, concerns about inflation subsided after hitting a 13-year high last month, as did concerns about COVID-19, despite news of continued price increases and the emergence of the Omicron variant. “

GBP / USD reacted higher after the report was released, jumping from 1.3318 to 1.3334.

Looking ahead to the rest of the week, the UK economic calendar would report no data on Thursday. Meanwhile, across the Atlantic, November durable goods orders, initial jobless claims and core PCE personal consumption spending, the Fed’s favorite gauge of inflation, will entertain GBP / USD investors.

GBP / USD Technical perspectives

The GBP / USD daily chart shows that USD bulls have the upper hand. The daily moving averages reside well above the current price, confirming the above. However, the short-term trend is to the upside and it will face strong resistance at the December 16 high in 1.3374.

In case of breaking above the level mentioned above, the GBP / USD would challenge the round level of 1.3400. A breakout of the latter could send the pair to the 50-day SMA at 1.3459.

On the other hand, the first support would be 1.3300. Once broken it would open the door to further losses. The first support would be the previous resistance on December 7 at 1.3289, followed by the low of December 21 in 1.3197.