GBP/USD Price Analysis: Soft Yields and Brexit Supporting Bids at 1.35

• The GBP/USD pair has rebounded from a multi-day high, and bulls take a short break after a two-day uptrend.
• London undermined confidence, said Shefkovic of the UK.
• Virus infections have reached record levels in the UK, prompting the government to consider creating “surge hubs.”

The GBP/USD price analysis revealed rounding to 1.3500 during Friday’s Asian session after updating its 7-week high on Thursday. The cable is pausing after two consecutive days of growth amid sluggish markets and a lack of catalysts, not to mention the year-end liquidity crisis.

Even though the UK continues to be plagued by the South African variant of Covid, Omicron, fierce government backlash and medical research dispelling fears about the virus strain are encouraging for GBP buyers. Bullish sentiment could also be bolstered by the battle over the US dollar and the Fed’s rate hike in 2022 after a strong year in 2021.

Nevertheless, the UK’s National Health Service (NHS) announced plans to set up “emergency centers” on Thursday. The so-called temporary medical facility became necessary after 189,213 cases were reported in the UK.

In addition to the UK suffering from the virus restrictions around the end-of-year celebrations, the US and Europe are also preparing for the same. Nevertheless, world leaders advise people to be cautious when supporting 2022. Reuters reported that the Director-General of the World Health Organization, Tedros Adhanom Ghebreyesus, said: “Better to cancel now and celebrate later than to celebrate now and mourn later.”

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Similarly, the Vice President of the European Commission, Maros Sefkowicz, expressed his disapproval of British threats in Der Spiegel. However, he was cautiously optimistic regarding the Brexit outcome. Moreover, post-Brexit border controls will come into effect in January, which adds pessimism, which should be reflected in the GBP/USD exchange rate.

To alleviate concerns about Omicron, US politicians hope to come to an agreement on a Build Back Better (BBB) plan. The number of initial jobless claims in the United States fell to 198,000 from 208,000 expected in the week ending December 24th. Additionally, in December, Chicago’s purchasing managers’ index rose from 62.0 to 63.1.

In the wake of the previous day’s release of 10-year US Treasury bond yields, Wall Street’s benchmarks posted moderate losses. At the latest, the S&P 500 futures are still around 4,775 points.

The GBP/USD exchange rate will likely remain on the sidelines at the end of the year due to a lack of important data/events and low liquidity.

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GBP/USD price technical analysis: Bulls run out of steam

The GBP/USD price stays slightly below the 1.3500 level after hitting 7-week highs around 1.3520. However, bar analysis is very interesting as we may see some widespread up bars that close near the middle and the lows. These bars indicate a bearish reversal that may trigger when the market returns to full volatility. Sustaining below 1.3500 will be a clue for the bears to crash to 1.3450 ahead of 1.3400.