GBP/USD: Relief Rally Likely After Sell-Off
MaiMarFX | Nov 29, 2021 04:43AM ET
The demand for riskier assets is taking a hit amid a new surge in COVID-19 cases and uncertainty concerning the new omicron strain. Investors fled into safe havens as volatility spiked. Early reports from Africa suggest that the strain could be more contagious than previous variants, but the impact on health may not be as severe.
Investors now wait for more clarity around the consequences of omicron. However, the market got used to trading COVID variants, and prices touched all-time highs when the fog was clearing. Traders should thus expect the same for omicron.
The US dollar remains in the spotlight this week as the US November nonfarm payrolls report on Friday will likely further fuel expectations of faster Federal Reserve tapering. An upbeat report could keep the dollar rally going.
h2 GBP/USD - Technical Outlook/h2From a technical perspective, the GBP/USD pair seems to be ready for recovery after hitting 1.33 and entering oversold territory.
As long as the cable remains above 1.3250 and 1.33, we see chances of a leg up with a first higher target seen at 1.35 followed by 1.36.
After last week’s sharp sell-off that sent the DAX tumbling below the 16000-mark, the index only found some halt at the following crucial 15000-mark.
Whether that support holds remains to be seen and depends on the investors’ risk-off mood. If 15000 breaks, we see the next support at 14800 followed by 14500. On the upside, the next resistance comes in at 15800.
Disclaimer: All trading ideas and expressions of opinion made in the articles are the personal opinion and assumptions of MaiMarFX traders. They are not meant to be a solicitation or recommendation to buy or sell a specific financial instrument.
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