- On Wednesday, the British pound was up 0.31%.
- Weak liquidity conditions and a lack of economic data exacerbate volatility in the last days of the year.
- GBP / USD Price Forecast: The 1 hour chart shows a bullish bias as GBP buyers look at the 1.3500 figure.
The British pound is recovering in the American session, trading at 1.3452 at time of writing. Investor sentiment is mixed, as shown by European stock indices fluctuating between winners and losers, while US equity futures point to a higher open. Factors such as Omicron variant evaluations and month, quarter, and year-end flow cause market participants to post gains as 2022 looms.
US Treasury Yields Rise, DXY Falls
In the US money markets, the US 10-year yield rises four basis points, exceeds the 1.50% threshold, stands at 1.522%, while the Treasury yield at 2 US years remains stable. Meanwhile, the US dollar index, which tracks the value of the US dollar against a basket of six rivals, is down 0.09% to 96.11, weighing on the dollar against the risk-sensitive British pound.
With 2022 just around the corner, investors are bracing for a year of higher inflation, a tightening central bank, led by the Federal Reserve, the coronavirus pandemic, and China’s economic outlook. As the easy money cycle draws to a close, for now at least, US Treasury yields began to reflect the US central bank’s sea change, as prices rose. US 10, 20 and 30 year yields.
The UK economic agenda absent left GBP / USD traders leaning toward the rest of the minimal US economic data.On the other side of the pond, the trade balance posted a deficit of 97.78B, more than the contraction. of 89.00B expected for November, while in about 30 minutes, pending November home sales are expected to increase up to 0.5%.
GBP / USD Price Forecast: Technical Outlook
The GBP / USD 1 hour chart shows that the pair remained subdued during the Asian session. However, when European traders got to their desks, they pushed the pair through the 100 and 50 hourly Simple Moving Averages (SMAs).
To the upside, the first high of GBP / USD would be the daily pivot R2 at 1.3483. A break below the latter would expose the 1.3500 level, followed immediately by the daily pivot R3 at 1.3529.
On the other hand, the first line of defense for GBP bulls would be the R1 daily pivot at 1.3457, followed by the confluence of the 50 SMA and the 1.3436 daily pivot point and then the 100 SMA at 1.3420.
Additional technical levels
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