GBP/USD Price Analysis: Downside remains open towards 1.3100 amid Omicron risks
- GBP/USD eyes deeper losses as Omicron restrictions derail BOE rate hike bets.
- The US dollar jumps on mixed market mood, critical daily support line remains at risk.
- 21-DMA is the level to beat for GBP bulls if the rebound from yearly lows kick in.
GBP/USD is trading mildly offered around 1.3200, unable to find its feet amid persistent concerns over the rising Omicron cases in the UK and resurgent US dollar demand.
The Plan B guidance announced by the UK PM Boris Johnson on Wednesday has pushed back the Bank of England (BOE) rate hike calls to February 2022, undermining the sentiment around the local currency.
Meanwhile, uncertainty over the new covid variant and its implications on the global economic growth keeps the investors on the edge, lifting the US dollar’s safe-haven appeal, which in turn weighs on cable.
Looking at GBP/USD’s daily chart, the price remains directed towards the critical falling support line at 1.3111.
On selling resurgence, the latter could give way, opening floors for a sharp sell-off towards 1.3000 the figure.
The 14-day Relative Strength Index (RSI) is sitting just above the oversold territory, allowing room for the additional decline.
GBP/USD: Daily chart
Alternatively, if the bulls manage to defend the yearly lows of 1.3167, then a rebound towards the bearish 21-Daily Moving Average (DMA) at 1.3341 cannot be ruled.
Ahead of that, the buyers will test the bearish commitments at 1.3300.
GBP/USD: Additional levels to consider