GBP/USD: Bears eager for a covid trigger to move in towards 1.3200

  • GBP/USD bears charged on weekend covid news.
  • UK contagion is a risk that blankets BoE rate hikes expectations.

GBP/USD, which has been tugged and pulled over recent weeks between central bank themes, now faces the risk of a covid contagion risk for the foreseeable future since the latest coronavirus threat. For the open, the bias leans to the downside considering the latest sell-off in the greenback and weekend reports that Omicron has breached the shores of the UK.

On Friday, GBP/USD's show of the upside was sold off sharply in the final hour of play, meeting an hourly level of support. Traders will be looking to see if this area, in the mid 1.33's, will hold up considering the implications that the sudden dilemma that the Bank of England will now need to juggle with regards to Omicron.

''Concerns it might be harder to combat the new variant found in southern Africa with vaccines also prompted investors to scale back their expectations for a Bank of England (BoE) interest rate rise in December, adding to downward pressure on the pound,'' Reuters reported.

The week ahead holds little domestically in terms of the pound, but market sentiment has been rocked and shifted towards the covid theme and US Nonfarm Payrolls, while critical, could take a back seat. The divergence between the Bank of England and the Federal Reserve has been a key driver and would normally be the catalyst. However, covid risks move into the driving seat for the open as the UK and EU cases spark fresh containment measures.

GBP/USD technical analysis 

From a technical perspective, the price still has room to move higher in the correction towards the 38.2% Fibo but at this juncture, it's already moved in on the old support. The lower time frames, such as the 4-hour chart will be monitored for bearish conditions and bearish structure to firm for the open. 1.3320 in this regard is compelling considering the prior highs and the W-formation's neckline that meets a 50% reversion:


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD trades below 1.1450 despite disappointing US data

EUR/USD is having a difficult time gathering bullish momentum in the early American session and trades in the negative territory below 1.1450. The US Census Bureau reported on Friday that Retail Sales in December fell by 1.9%, missing the market expectation of a no-change by a wide margin.


GBP/USD drops below 1.3700 as dollar gains traction

GBP/USD stays under modest bearish pressure in the American session and trades below 1.3700. The US Dollar Index is clinging to modest daily recovery gains near 95.00 despite weaker-than-forecast macroeconomic data releases from the US.


Gold fluctuates in daily range above $1,820 after US data

Gold declined to $1,820 during the European trading hours but managed to edge higher toward $1,830 in the early American. The benchmark 10-year US Treasury bond yield retreated from 1.75% after the dismal US data, allowing XAU/USD to gain traction.

Gold News

Dogecoin price on track to hit new highs, rallying 16% with Tesla payments going live

Tesla announced that it accepts Dogecoin and cannot receive or detect any other cryptocurrency. Analysts have predicted an explosive rally in Dogecoin price, continuing the uptrend. 

Read more

Why did TSLA stock fall 7% on Thursday?

Tesla stock dumps on Thursday as tech takes a bath. TSLA shares fell nearly 7% to close at $1,031.56. Tesla support at the short-term pivot remains at $980.

Read more