GBP/USD Outlook: Gains Above 1.33 Ahead of Key UK/US Data
- The GBP/USD is holding onto its recovery from its yearly low.
- Brexit battle backpedal in France, but it’s not fishing, traders push back BOE rate hike calls to 2022 on more Omicron cases in the UK.
- ADP Employment Change and UK/US PMIs will adorn the calendar.
The GBP/USD price outlook has improved significantly after finding a decent pullback from the yearly lows. However, the trend is still downside.
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On Wednesday, the GBP/USD pair will renew its daily high of 1.3325 ahead of the London opening. Despite static daily readings and the steepest monthly decline since September, the cable pair hit an annual low on Tuesday before November ended.
As the number of a dangerous strain of virus rose in the UK, traders of the cable pair were initially concerned about a South African variant of the coronavirus called Omicron. However, the CME BOEWatch tool displayed market forecasts that the bank would not raise interest rates as a result.
Late in the month, Bloomberg reported a positive headline from France that contributed to the consolidation to favor GBP/USD buyers. In less than a week after Emmanuel Macron criticized Boris Johnson for not taking immigration seriously enough, Bloomberg reports that France is preparing to propose to the European Union on migration.
Fed chairman Jerome Powell, on the other hand, prompted a rebound in US Treasury bond yields from a two-month low and raised concerns about inflation in the run-up to the December meeting. Recently, mixed US data and a controversy about the ability to exist vaccines to control the newly discovered COVID-19 variant have been accompanied by cautious optimism in China and a decline in South African viral infections in favor of GBP/USD buyers.
Markit’s November Total PMI may provide tentative guidance going forward, but we’re eagerly awaiting the ISM US Manufacturing PMI for a clear indication. In addition, it will be imperative to pay close attention to the statements made by the US Federal Reserve (ADP Employment Change) and by Jerome Powell, as well as the speech by the governor of Bank of England, Andrew Bailey.
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GBP/USD price technical outlook: Bulls still shy of moving ahead
The GBP/USD looks positive above the 1.3300 mark. However, the pair seems to be struggling to surge above the key 20-period SMA on the 4-hour chart. The average daily range is 43% till now, which is higher than usual. The pair is expected to wobble in a wide range while the volume is still not clearly bullish.
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