GBP/USD changed course and trimmed early losses, now trading above 1.3230. Heating US inflation figures hint at steeper Federal Reserve tightening. The pound is struggling with Omicron and Brexit headlines.
From a technical perspective, the pair's inability to gain any traction or register any meaningful recovery supports prospects for an extension of the recent bearish trend. That said, RSI (14) on the daily chart is hovering just above the oversold territory and warrants some caution for aggressive bearish traders. Nevertheless, the stage still seems set for a test of the YTD low, around the 1.3160 region touched on Wednesday. The next relevant support is pegged near the 1.3125 region before the pair breaks below the 1.3100 mark and accelerate the decline towards the 1.3050-45 region.
On the flip side, the 1.3220-30 region now seems to have emerged as an immediate hurdle. The mentioned barrier coincides with a short-term descending trend-channel support breakpoint, which if cleared could trigger a short-covering move. However, any subsequent move up is likely to face stiff resistance and seen as a selling opportunity near the weekly swing high, just ahead of the 1.3300 mark. A sustained strength beyond should allow the pair to move back towards the 1.3340-50 supply zone en-route the 1.3370 area and the 1.3400 round figure.
