Sterling capitalized on the USD weakness and pushed above the 1.35 threshold for the first time since late November.
Meanwhile, the UK recorded a fresh all-time high in daily covid cases to the tune of above 122,000. Britain’s NHS “is now on a war footing,” one of its top medical officials warned on Thursday. He said they would start erecting field hospitals to absorb a feared surge in hospitalizations as cases continue to climb. In a statement, the service outlined plans for temporary wards in England, called “Nightingale hubs,” in response to the surge in Omicron cases.
However, despite the massive surge in cases, deaths remain low. Furthermore, they show no signs of spiking with the cases, likely confirming that the Omicron variant is less severe than the previous variants of the virus. Additionally, it looks like the Omicron wave in South Africa is already over as cases there have dropped significantly. Therefore, the panic in media is absolutely unjustified.
Elsewhere, according to Politico, European Commission Vice President warned of a Brexit deal ‘collapse’ if the UK exits Northern Ireland (NI) Protocol.
From other news, US jobless claims were released today, showing a decline to 198,000 from 206,000 the week before. At the same time, continuing claims improved to 1.716 million, down from 1.856 million previously. But, unfortunately, the greenback was unable to benefit from those numbers.
Short-term appears bullish
The next resistance for bulls will likely be at 1.36, where previous lows are located. We could see another leg higher if the pair jumps above that level, targeting the 200-day moving average (green line) at 1.3740.
It looks like the USD could slip further as several USD pairs are breaking upside from their recent ranges.
Alternatively, the support could be located in the 1.3420 region, and as long as the GBP trades above it, the short-term outlook seems bullish.