• The discovery of a new COVID-19 variant in South Africa that could be harder to combat spurred risk-off market mood.
  • The British pound fell on COVID-19 new variant though ended the day in the green, up 0.09%.
  • GBP/USD upward move caused by US dollar weakness.

The British pound recovers from earlier losses during the day, despite risk-of-market sentiment clouding the financial markets due to discovering a new COVID-19 variant in South Africa. At the time of writing, the GBP/USD is trading at 1.3341, up some 0.14%.

In the overnight session, market sentiment dampened as South Africa announced the discovery of a new COVID-19 variant.

The World Health Organization (WHO) said that it is a variant of concern, posing a threat that could confound countries’ efforts to slow the spread of COVID-19. According to sources cited by CNBC, “that the variant contains a “unique constellation” of more than 30 mutations to the spike protein, the component of the virus that binds to cells. This is significantly more than those of the delta variant.”

The mutations found on the B.1.1.529 COVID-19 variant called omicron are linked to antibody resistance, affecting how the virus behaves regarding vaccines, treatments, and transmissibility. According to Tulio de Oliveira, a Scientist in South Africa, cited by CNBC, said the variant contains around 50 mutations.

Putting COVID-19 theme on the side, the latest development in Brexit could weaken the GBP. On Friday, UK Brexit Minister David Frost said that “while we would still like to find a negotiated solution with the EU on the Northern Ireland Protocol, the gap between our positions is significant, and we are ready to use Article 16.” Meanwhile, his counterpart Maros Sefcovic said that “a decisive push was needed to ensure predictability” in the case of supplying medicines.

Back to the GBP/USD, in the overnight session, the pair remained subdued, despite the risk-off mode that weakened most risk-sensitive currencies, versus safe-haven peers, except for the US dollar. The British pound dipped as low as the S2 daily pivot point at 1.3272 when the coronavirus news crossed the wires but bounced off, reclaiming the 1.3300 figure.

That said, GBP/USD traders would need to focus on the developments of Brexit, the Bank of England, and the new coronavirus variant. On Friday, GBP/USD bulls held their ground; however, coronavirus developments over the weekend could worsen market mood conditions that could favor USD bulls.

GBP/USD Price Forecast: Technical outlook

The GBP/USD pair keeps trading within a descending channel of 350 pips wide or so. The dip witnessed in the session on risk aversion briefly touched the bottom-trendline of the abovementioned. However, it rejected the downward move, forming a candle chart called “hammer” in the daily chart, indicating that bulls regain control in the near term. Nevertheless, the daily moving averages (DMA’s) with a downslope reside above the spot price, reinforcing the downtrend.

In the outcome of a corrective move to the upside, the November 12 swing low support-turned-resistance at 1.3352 would be the first resistance. A breach of that level would expose crucial resistance areas, like the September 29 cycle low support now resistance at 1.3411, followed by the November 18 high at 1.3513.

On the other hand, the 1.3300 psychological would be the first support, that once broken, could pave the way for further losses, finding key support levels on its way down. The next support would be the November 26 low at 1.3278, followed by the figure at 1.3200.


Today last price 1.3341
Today Daily Change 0.0019
Today Daily Change % 0.14
Today daily open 1.3322
Daily SMA20 1.3482
Daily SMA50 1.3594
Daily SMA100 1.3701
Daily SMA200 1.3824
Previous Daily High 1.3354
Previous Daily Low 1.3305
Previous Weekly High 1.3514
Previous Weekly Low 1.3396
Previous Monthly High 1.3834
Previous Monthly Low 1.3434
Daily Fibonacci 38.2% 1.3324
Daily Fibonacci 61.8% 1.3335
Daily Pivot Point S1 1.3301
Daily Pivot Point S2 1.3279
Daily Pivot Point S3 1.3253
Daily Pivot Point R1 1.3349
Daily Pivot Point R2 1.3375
Daily Pivot Point R3 1.3397



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 struggles to rebound, holds near 1.1150 after US data

EUR/USD trades around 1.1150 in the early American session on Friday as investors assess the latest inflation data from the US. According to the US Bureau of Economic Analysis, Core PCE Price Index rose to 4.9% on a yearly basis in December from 4.7% in November, surpassing the market expectation of 4.8%. 


GBP/USD clings to small gains above 1.3400 on mixed US data

GBP/USD posts modest daily gains slightly above 1.3400 on Friday as the dollar rally loses steam. The data from the US showed that the core PCE inflation edged higher to 4.9% in December. On a negative note, Personal Spending contracted by 0.6% on a monthly basis.


Gold recovers modestly after US data, stays below $1,800

Gold managed to stage a rebound from the multi-week low it set below $1,780 but continues to trade deep in the red near $1,790. The benchmark 10-year US Treasury bond yield is rising more than 1% on the day after US data, limiting XAU/USD's recovery.

Gold News

Bitcoin Weekly Forecast: Federal Reserve cannot tame BTC’s uptrend

Bitcoin has experienced some significant losses over the past few weeks, with a more dramatic drop occurring this week after the Fed's decision was announced. As losses have extended and BTC has entered into the $30,000 zone, concerns regarding Bitcoin being in a bear market have increased.

Read more

Apple share price set to rise after another record quarter

With the Nasdaq closing at its lowest level in seven months yesterday, the Apple share price has also found itself on the end of the recent weakness in tech shares, down over 12% from its record highs in early January.

Read more