The sentiment linked British pound has been under tremendous selling pressure due to the new Omicron coronavirus pandemic (Covid-19) strain. The GBP/USD Forex pair is falling lower as traders grapple with what new Covid-19 restrictions Prime Minister Boris Johnson will put into place as new coronavirus cases are on the rise in the United Kingdom.
The United Kingdom is worried about weakening immunity from coronavirus vaccines and a cold winter which will help Covid-19 to spread. While the new Omicron coronavirus strain is now in play, the Delta Covid-19 variant remains dominant.
Even though it is unknown how the UK Government will react to the recent spike in new pandemic cases, Forex traders are still nervous and this is weighing on the British pound. Now the Bank of England is getting ready to make a move.
The economic calendar is fairly light on Monday. Rightmove will publish their monthly UK housing price index (HPI) and the Bank of England will release their financial stability report. Germany will publish their monthly WPI.
Daily British Pound Technical Analysis
Looking at the above daily MT 4 price action chart, the technical indicators are still not in oversold territory. The 14 day relative strength index is above 30 which could signal that bearish momentum in the GBP/USD Forex market has lessened, the British pound bears remain in control.
Price action remains within a down trend channel in play since the end of November. The GBP/USD currency exchange rate has also been seeing, on nearly a daily basis, lower highs and lower lows.
Immediate support lines up at the swing low in play at 1.1395. The 2021 low price point at 1.3175 followed by 1.3110. The round number of 1.30 then comes into focus.
On the upside, immediate resistance lines up at 1.33. A daily close above this level opens the door for former support now resistance at 1.3350. The upside barrier at 1.34 then comes into focus.