#GBPUSD @ 1.17801 -imp levels: meets with a fresh supply on Friday and slides back below the 1.1800 mark.

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• GBP/USD meets with a fresh supply on Friday and slides back below the 1.1800 mark.
• The USD regains traction amid hawkish Fed expectations and exerts downward pressure.
• Recession fears continue to undermine sterling and contribute to the intraday decline.
• Traders now eye the US PCE data for some impetus ahead of Fed Chair Powell’s speech.

The pair currently trades last at 1.17801.

The previous day high was 1.1864 while the previous day low was 1.1784. The daily 38.2% Fib levels comes at 1.1834, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.1815, expected to provide resistance.

The GBP/USD pair comes under some renewed selling pressure on Friday and extends the overnight pullback from the vicinity of the weekly high. Spot prices continue losing ground through the early European session and weaken further below the 1.1800 mark, hitting a fresh daily low in the last hour.

The steady intraday descent is exclusively sponsored by the emergence of fresh buying around the US dollar, bolstered by hawkish Fed expectations. The overnight hawkish remarks by Fed officials reaffirm market expectations for a further policy tightening by the US central bank. In fact, the markets are pricing in a greater chance of a supersized 75 bps rate hike move at the September FOMC meeting.

The British pound, on the other hand, is undermined by worries about a deeper economic downturn, amid the recent absurd surge in energy prices and the persistent rise in inflationary pressures. The Bank of England had predicted earlier this month that the country will enter a prolonged recession from the fourth quarter of 2022 and warned that the UK faces a very big inflation shock.

Apart from the aforementioned fundamental factors, sustained weakness below the 1.1800 mark seems to have aggravated the bearish pressure surrounding the GBP/USD pair. This might have already set the stage for additional losses. Hence, a subsequent slide towards retesting the YTD low, around the 1.1720-1.1715 area touched earlier this week, looks like a distinct possibility.

Traders, however, might prefer to wait for a more hawkish message by Fed Chair Jerome Powell at the Jackson Hole Symposium amid the uncertainty over the size of the next rate hike. In the meantime, traders on Friday will further take cues from the US Core PCE Price Index. The data might influence the USD price dynamics and produce short-term trading opportunities around the GBP/USD pair.

Technical Levels: Supports and Resistances

GBPUSD currently trading at 1.1782 at the time of writing. Pair opened at 1.1832 and is trading with a change of -0.42 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 1.2044, 50 SMA 1.2059, 100 SMA @ 1.2318 and 200 SMA @ 1.2843.

The previous day high was 1.1864 while the previous day low was 1.1784. The daily 38.2% Fib levels comes at 1.1834, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.1815, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.1789, 1.1746, 1.1709
• Pivot resistance is noted at 1.187, 1.1908, 1.1951

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