FX.co ★ Analysis of GBP/USD on December 15. Omicron could become biggest threat since pandemic began

According to the wave analysis, the last wave in C is still under formation. A very weak rise in the currency points to the fact that wave e in C could become longer than expected. However, it should have been finished long ago.

Unfortunately, the news flow will hardly support the pound sterling. It is difficult to predict how the situation may change after the Bank of England and the European Central Bank announce their key rate decisions. An increase from the lows logged earlier could be explained as a completion of wave e in C. However, the rise is really insignificant to make such conclusions. A failure to break the level of 1.3271 reflects that traders are not ready to buy the asset. The British pound could be supported by the BoE's hawkish rhetoric.

Omicron could become a serious threat to the UK.

On Wednesday, the pound/dollar pair advanced by 30-40 pips. However, before the publication of the FOMC meeting results, market activity was very low. Since the beginning of the week, both the euro and the pound sterling have been moving flat. Their wave structures are becoming longer. Thus, traders had to wait for the FOMC meeting results. What is more, the coronavirus issue, including Omicron, has also grabbed all the headlines. According to the UK doctors, the new strain could become the most serious threat to the country's population and the government since the pandemic began. Omicron is rapidly spreading and even fully vaccinated people may catch the illness. Boris Johnson urges people to remain cautious and receive the third dose of the vaccine.

The politician said that in South Africa, where the new strain was discovered in late November, the number of hospitalizations doubled in a week. The British Prime Minister also asked for help from volunteers in the fight against the new strain. He noted that the country would need tens of thousands of people to resist the virus. In the UK, the first patient with Omicron died on December 13. Thus, the epidemiological situation is deteriorating again. The IMF has already concluded that economic growth may slow down in the country in the next three or four months. However, no one knows how serious the new wave of diseases could be. Thus, no one can provide accurate forecasts.

Conclusion

Wave e may end its formation, but there are still some doubts. I recommend that traders wait for a successful break of 1.3271 that is a 61.8% Fibonacci level. After that, they may start buying the instrument.

Bigger time frame

Since January 6, the downward section of the trend has been forming. It could be of any length. At the moment, wave C may end its formation, but there are no proofs. The downward section may become significantly longer.