GBP/USD trims three-consecutive days losses, braces to 1.3300

• Sterling advances, amid a mixed-market sentiment, favored by rising US equities.
• Omicron COVID-19 nervousness seems to ease as investors’ risk appetite moderately improves.
• GBP/USD Technical outlook: In the 4-hour chart, the 50-SMA has capped three times any GBP upside moves, at press time lies around 1.3330s

The British pound edges higher, snapping three days losses so far, up some 0.32%, trading at 1.3307 during the New York session at press time. Market conditions remain mixed, which is portrayed by European stock indices falling, contrary to the US, with the Dow Jones, the S&P 500, and the Nasdaq rising. Also, it seems that investors’ worries linked to the Omicron new coronavirus strain just discovered 1in the last week, ease as a World Health Organization (WHO) official said that some of the early indications are that most cases are mild.

Either way, markets would likely remain volatile unless market participants get more clarity on the new COVID-19 variant.

Apart from this, in the overnight session, the GBP/USD pair printed a daily low at 1.3263, amid USD strength on dampening market sentiment through the Asian session. However, the British pound is staging a rebound, trading above the 100 and the 50-hour simple moving averages (SMA’s) that could favor GBP bulls in the near term, unless USD bulls could push the pair below the 1.3300 handle. The upward move was courtesy of USD selling pressure as US equity indices rise, influencing risk-sensitive currencies like the GBP.

On Wednesday, two Fed policymakers favor a fast bond taper. In an appearance at the Congress, Fed’s Chair Powell reiterated that a faster wind-down of the QE’s program is necessary so that the Fed could tame inflationary pressures. Later on, Cleveland Fed President Loretta Mester expressed that a more rapid taper would be like “buying insurance” in the necessity of hiking rates as need it

In the Brexit saga, according to BBH analysts, noted that “reports suggest a compromise on fishing rights is within reach, with the EU hailing the granting of a new batch of fishing licenses by the UK as progress towards a concrete long-term deal later this month.” 

In the macroeconomic docket, there’s nothing from Canada to report. On the US front, Initial Jobless Claims for the week ending on November 26 rose to 222K, better than the 240K forecasted, while the Continuing Jobless Claims for the week ending on November 18 rose to 1.956M, lower than 2M for the first time, since March 2020.

GBP/USD Price Forecast: Technical outlook

The GBP/USD in the 4-hour chart has a downward bias, as the GBP/USD has tested dynamic resistance at the 50-simple moving average (SMA) three times, failing to overcome it. Also, the 100 and the 200-SMA on top of the shorter time-frame one adds more fuel to the bearish bias.

In the outcome of GBP/USD further falling, the first support would be December 1 low at 1.3261, followed by a confluence area around November 30 low and the figure at 1.3190-1.3200.