GBP/USD steady around 1.3250s amid a positive market-mood
|- The British pound is up but has failed to capitalize an attempt towards 1.3300 amid a risk-on market.
- BoE’s Broadbent is unclear how he will vote in December’s meeting.
- GBP/USD Price Forecast: In the short-term, to the upside, but GBP bulls need to reclaim 1.3264.
The British pound continues advancing during the New York session, up some 0.12%, trading at 1.3255 at press time. Market mood has improved throughout the weekend, as data from South Africa points out that the omicron variant is more contagious than alpha and delta; nevertheless, the variant cases have been relatively mild.
In the European session, Bank of England’s (BoE) Governor Ben Broadbent said that the tight labor market will add pressure on inflation and expects it to “comfortably exceed” 5% in April of 2022. He further said that he did not know he would vote to raise rates in December but made it clear that UK’s central bank forecasts showed a need for higher rates.
Despite the aforementioned, money market futures have scaled back the possibility for a BoE’s rate hike in December’s meeting, blamed on omicron-related uncertainty risks. Contrarily, in the US, investors are expecting at least two rate hikes by 2022, once the bond-taper process is completed by March of the same year.
In the last week, the market witnessed a change of Fed Chief Jerome Powell’s neutral-dovish stance towards a hawkish one when he said that he would favor a faster QE’s reduction amid “removing” the word “transitory” to inflation.
Apart from this, the UK economic docket featured the Construction PMI for November, improving to 55.5 from 54.6 In the previous month. On the US front, an absent economic docket, and Fed’s blackout, would keep traders focused on the Consumer Price Index (CPI), which will be unveiled on Friday.
GBP/USD Price Forecast: Technical outlook
The GBP/USD dipped to 1.3225 amid the London fix in the last couple of hours, followed by a bounce above the daily central pivot at 1.3249. The pair is approaching strong resistance at the 50-hour simple moving average (HSMA) at 1.3264, which, if broken, would give way for GBP bulls as they aim towards the 100-HSMA at 1.3282. Additionally, the Relative Strength Index (RSI) points upward at 51.50, meaning that GBP still have the upper hand in the short term, unless they fail to reclaim the 100-HSMA
On the flip side, if USD bulls hold their ground against pound ones, the first support would be 1.3208, which, once broken, would expose the year-to-date low just 15 pips below of it at 1.3194.
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