Slobodan Drvenica
Windsor Brokers
GBP/USD
Cable lost traction and fell to new December’s low in December, coming under fresh pressure on reports that new Covid rules in the UK are imminent.
Media reports suggest that PM Johnson could introduce new restrictions to curb the spread of new Omicron variant, with new measures to be implemented as early as tomorrow.
This would further weaken the pound ahead of highly anticipated BoE policy meeting next week.
Some policymakers say not sure on how they will vote, although expectations for a rate hike on surging inflation are still high, despite official consensus of economists for unchanged policy.
The central bank expects price pressures to continue to increase in the first half of 2022, seeing inflation above 5% before it starts easing.
Pound will likely rise if the BoE opts to increase interest rates on Dec 16 meeting, but may lose ground if BoE surprises again.
The pair is pressuring a key supports at 1.3160 zones (Fibo 38.2% of 1.1409.1.4249 rally / 200WMA) break of which would result in a sub-1.30 drop.
The base of thick weekly cloud offers strong resistance at 1.3250 which should cap and keep bears firmly in play.
Res: 1.3250; 1.3275; 1.3345; 1.3358.
Sup: 1.3160; 1.3134; 1.3100; 1.3046.
Interested in GBP/USD technicals? Check out the key levels
The information contained in this document was obtained from sources believed to be reliable, but its accuracy or completeness cannot be guaranteed. Any opinions expressed herein are in good faith, but are subject to change without notice. No liability accepted whatsoever for any direct or consequential loss arising from the use of this document.
Recommended Content
Editors’ Picks
AUD/USD: Extra gains in the pipeline above 0.6520
AUD/USD partially reversed Tuesday’s strong pullback and regained the 0.6500 barrier and beyond in response to the sharp post-FOMC pullback in the Greenback on Wednesday.
EUR/USD meets support around 1.0650
EUR/USD managed to surpass the key 1.0700 barrier in response to the intense retracement in the US Dollar in the wake of the Fed’s interest rate decision and Chair Powell’s press conference.
Gold surpasses $2,300 as Dollar tumbles
The precious metal maintains its constructive stance and trespasses the $2,300 region on Wednesday after the Federal Reserve left its FFTR intact, matching market expectations.
Bitcoin price reclaims $59K as Fed leaves rates unchanged
The market was at the edge of its seat on Wednesday to see whether the US Federal Reserve (Fed) would cut interest rates during the Federal Open Market Committee (FOMC) meeting.
The market welcomes the Fed's statement
The market has welcomed the Fed statement, and the S&P 500 is higher in its aftermath, the dollar is lower and Treasury yields are falling. There is still only one cut priced in by the Fed.