GBP/USD Price Analysis: Fresh Monthly Highs Above 1.34 Before US Data

• The GBP/USD pair gained strong positive momentum for the third day in a row on Thursday.
• The pound gained strength when concerns about Omicron were eased.
• Any further gains ahead of the US data release could be offset by a slight gain in the dollar.

The GBP/USD price analysis shows a break out of its intraday range in the early European session, hitting a near 1-month high of 1.3400

As the pair recovered from 1.3175 year-to-date levels this week, it gained strong follow-up strength for the third day in a row on Thursday. The optimism was prompted by reports that current vaccines may be more effective than earlier thought against the new variant. This helped allay concerns about the rise in UK COVID-19 cases and significantly impacted the British pound.

-Are you looking for the best trading robots? Check out our detailed guide-

According to a South African study, the Omicron strain was found to cause fewer hospitalizations and serious illnesses than the Delta strain. In response, the market became more optimistic, which undermined the dollar’s reputation as a safe haven. However, despite the dollar’s losses, the rise in US government bond yields, coupled with a loud forecast from the Fed, helped contain losses. Together, this and Brexit uncertainty may limit the profit of the GBP/USD pair.

The UK foreign secretary responsible for the Brexit negotiations, Liz Truss, said the UK remains committed to the Northern Ireland protocol. The UK will remain prepared to apply Article 16 of the European Court of Justice does not cease to serve as the final judge in the scheme, Truss said. It was reported that the Irish Prime Minister said that negotiations between the EU and the UK were progressing.

Thus far, the GBP/USD pair has maintained strong intraday gains and progressed beyond the swing highs reached by the Bank of England, which could set the stage for further gains. However, there will be no significant data released for the UK, affecting the market dynamics. Therefore, the US dollar exchange rate dynamics will continue to play a key role in influencing the pair. Traders will receive signals from US macro releases later during the early North American session.

-Are you looking for the best index ETF to invest in? Check out our detailed guide-

The Core PCE price index and durable goods data are highlighted in the US economic paper. With events surrounding the Coronavirus and broader market risk sentiment, this will spur demand for dollars and give the pound/dollar pair some momentum. Additionally, traders will be looking at Brexit-related headlines for opportunities to profit from short-term options.

GBP/USD price technical analysis: Bulls break 200-SMA

The GBP/USD price broke above the 200-period SMA on the 4-hour chart. The pair has marked monthly highs above 1.3400 area. However, the pair has constantly been rising and may need a correction towards 1.3360 (200-period SMA) before continuing to move higher. The average daily range is 74% now, indicating further room for upside.