GBP/USD is consolidating gains below 1.3300 so far this Tuesday, underpinned by a renewed downside in the US dollar across the board amid an improving market mood. Easing fears over the new Omicron covid variant keep the overall market sentiment buoyed. The GBP/USD pair built on the previous day's positive move from the vicinity of the 1.3200 mark and gained some traction during the first half of the trading action on Tuesday. In the absence of any negative Brexit-related headlines, rising bets for an imminent rate hike by the Bank of England in December acted as a tailwind for the British pound. Apart from this, a subdued US dollar demand extended some support to the major. Reports that Omicron patients had only shown mild symptoms helped ease fears about the potential economic fallout from the new variant of the coronavirus and boosted investors' confidence.

BULLISH AND BEARISH CONDITIONS / POSSIBILITIES :

rom a technical perspective, the emergence of fresh selling at higher levels validates last week's bearish break through a short-term descending channel extending from July. This, in turn, supports prospects for an extension of the recent downward trajectory from the 1.3830-35 region touched in October. Hence, a subsequent slide back towards testing sub-1.3200 levels, or the YTD low set last week, remains a distinct possibility. Some follow-through selling should pave the way for a fall towards the next relevant support near the 1.3125 region en-route the 1.3100 mark and the 1.3050-45 region.

On the flip side, the 1.3290-1.3300 region might continue to act as immediate strong resistance. A sustained strength beyond could prompt some short-covering move and accelerate the recovery towards the 1.3340-50 supply zone. This is followed by resistance near the 1.3370 area and the 1.3400 level. The latter should act as a key barrier, which if cleared decisively will suggest that the pair has formed a near-term base and negate the bearish outlook.

CABLE Eyes Support Near 1.3200 - 1.3180

Dec 07 2021

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