Hi, dear traders!
According to the H1 chart, GBP/USD continued to rise towards the Fibonacci level of 50% (1.3497) after closing above the 38.2% retracement level (1.3418) yesterday. There are practically no retracement moves, and the upward price corridor indicates a bullish sentiment among investors. If the pair settles above the corridor, it could lead to a reversal followed by a rise towards the retracement level of 23.6% (1.3319).
The number of confirmed Omicron cases continues to rise in the UK. Prime minister Boris Johnson earlier ruled out a lockdown. Public opinion on his decision remains mixed. UK media has reported about a possible closing of pubs, bars and restaurants. Currently, the authorities are urging citizens to vaccinate. Boris Johnson has announced that booster shots would be made available in January.
According to the H4 chart, the pair bounced off 1.3173 four times before resuming its upward movement towards the retracement level of 50,0% (1.3457). A bounce of this level could lead to a slight decline for GBP/USD. If the pair closes above this retracement level, it could rise towards the next Fibonacci level of 38.2% (1.3642). A bearish divergence near the MACD indicator is possible, but it is unclear if it would emerge in the near future.
US and UK economic calendar:
There are no events in the US and the UK today.
Outlook for GBP/USD:
Traders are advised to open long positions if the pair closes above the Fibonacci level of 50% (1.3457) on the H4 chart, or if it closes above the 38.2% retracement level (1.3418) on the H1 chart. Short positions could be opened if GBP/USD bounces off 1.3457 on the H4 chart. If the pair closes below the ascending price channel on the H1 chart, it could decline with 1.3319 being the target.
