GBP/USD Forecast: Pound closes in on key support on Omicron fears

GBP/USD has started to edge lower after the UK raised the COVID threat level.
Dollar gathers strength at the start of the week.
GBP/USD could suffer additional losses below 1.3200/1.3190 support area.

Eren Sengezer FXStreet

After rising toward 1.3300 ahead of the weekend, GBP/USD has failed to preserve its bullish momentum on Monday with the latest coronavirus headlines from the UK weighing on the British pound. In case buyers fail to defend the support area that seems to have formed around 1.3200, the pair could extend its slide in the near term.

On Sunday, British Prime Minister Boris Johnson warned that two doses of vaccine would not be enough against the Omicron "tidal wave" that the UK was facing. Additionally, the UK has raised the COVID threat to 'Level 4', one below the maximum.

Meanwhile, Health Secretary Sajid Javid said that the Omicron variant was spreading at a "phenomenal rate" in England but noted that they had not yet confirmed any Omicron-related deaths.

GBP/USD could find it difficult to regain its traction with investors assessing the potential impact of the Omicron variant on the Bank of England's (BoE) policy decisions, which will be announced later in the week.

On the other hand, the broad-based dollar strength, as reflected by the 0.25% gain seen in the US Dollar Index, is putting additional weight on the pair's shoulders. There won't be any high-tier data releases featured in the US economic docket. Later in the day, the BoE will publish the minutes of the Financial Policy Committee meeting.

GBP/USD Technical Analysis

GBP/USD is trading below the 50-period SMA on the four-hour chart and the Relative Strength Index (RSI) indicator has declined below 50, suggesting that buyers show no interest in the pound for the time being.

On the downside, 1.3220 (20-period SMA) aligns as initial support before the 1.3200/1.3190 area (static level, psychological level). In case a four-hour candle closes below the latter, the pair could extend its slide toward 1.3160 (December 8 low).

Resistances are located at 1.3250 (50-period SMA), 1.3280 (static level) and 1.3300 (psychological level, 100-period SMA).

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

AUD/USD remains below 0.7000 amid light trading

AUD/USD fills a modest bearish gap on Monday, but remains below 0.7000 in the Asian session amid holiday-thinned liquidity. The US Dollar attempts a bounce even as US bond yields pull back from multi-year highs, limiting the pair. Moreover, diminishing odds of another RBA rate hike in November cap the Aussie.

USD/JPY hovers above 158.00 amid Japan/ US holiday

USD/JPY extends its range-bound price action into a new week, trading above 158.00 as bulls remain on high alert amid speculation that authorities will step in to prop up the Japanese Yen. Meanwhile, softer US bond yields keep US Dollar bulls on the back foot and cap the pair's upside. However, geopolitical uncertainties could limit losses for the safe-haven buck amid thin liquidity due to a holiday in Japan and the US.

Gold sticks to modest losses; seems vulnerable below $4,200 on Fed hike bets

Gold extends its intraday retracement slide from a one-week high, hitting a fresh daily low around $4,170 during the early European session. The US Dollar attracts fresh buyers after a modest downtick amid the US Federal Reserve's hawkish outlook, which, in turn, is seen as weighing on the non-yielding bullion.

Pi Network Price Forecast: PI defends $0.0800 support as selling pressure mounts

Pi Network is trading in the red on Monday, hovering above $0.0800 as selling pressure mounts. PI token’s speculative demand is easing, with Open Interest below $9 million despite rising social chatter, hinting at panic-driven buzz among investors. The technical outlook for PI suggests a bearish bias, with the risk of breaking below the $0.0800 support level.

USD/INR: Deep in red below 96.00 as RBI rescues Indian Rupee

After opening significantly higher against the US Dollar (USD) on Monday, the Indian Rupee (INR) clings to recovery gains near 95.80. The pair remains undermined by the Reserve Bank of India’s (RBI) fresh measures to curb US Dollar demand, which has brought relief for the Indian currency.

Has Bitcoin really escaped the macro forces it was built to fight?

Over 17 years ago, Satoshi Nakamoto designed Bitcoin (BTC) on the back of a global financial crisis as an alternative to the global monetary system outside the control of central banks, governments and traditional intermediaries. This raises a key question: has Bitcoin really become independent of the macroeconomic forces it was built to challenge?