#GBPUSD @ 1.16445 catches aggressive bids on Friday amid broad-based USD weakness. (Pivot Orderbook analysis)

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• GBP/USD catches aggressive bids on Friday amid broad-based USD weakness.
• The risk-on impulse prompts some long-unwinding around the safe-haven buck.
• Aggressive Fed rate hike bets, the UK’s bleak economic outlook might cap gains.

The pair currently trades last at 1.16445.

The previous day high was 1.1561 while the previous day low was 1.146. The daily 38.2% Fib levels comes at 1.1499, expected to provide support. Similarly, the daily 61.8% fib level is at 1.1522, expected to provide support.

The GBP/USD pair gains strong positive traction on Friday and continues scaling higher through the early part of the European session. The momentum lifts spot prices to a one-and-half-week high, closer to mid-1.1600s, and is sponsored by the heavily offered tone surrounding the US dollar.

A goodish recovery in the risk sentiment – as depicted by a positive tone around the equity markets – drags the safe-haven buck further away from a two-decade high touched earlier this week. In fact, the key USD Index, which measures the greenback’s performance against a basket of currencies, dives to a fresh monthly low and turns out to be a key factor behind the GBP/USD pair’s intraday momentum to the upside.

The British pound, on the other hand, draws support from the new UK Prime Minister Liz Truss’s plans to cap energy bills for the next two years, which is seen as a welcome development for households. That said, the worsening outlook for the UK economy might continue to act as a headwind for sterling. Apart from this, hawkish Fed expectations should limit the USD corrective slide and cap the GBP/USD pair.

The markets seem convinced that the Fed will stick to its aggressive policy tightening path to tame inflation and have been pricing in a greater chance of a 75 bps rate hike at the September meeting. The bets were reaffirmed by Fed Chair Jerome Powell’s hawkish remarks on Thursday, which remain supportive of elevated US Treasury bond yields and support prospects for the emergence of some USD dip-buying.

Hence, it will be prudent to wait for strong follow-through buying before confirming that the GBP/USD pair has formed a near-term bottom around the 1.1400 mark and positioning for any further gains. In the absence of any major market-moving economic releases, speeches by Fed officials might influence the USD later during the early North American session and provide some impetus to the GBP/USD pair.

Technical Levels: Supports and Resistances

GBPUSD currently trading at 1.1636 at the time of writing. Pair opened at 1.1505 and is trading with a change of 1.14 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 1.1759, 50 SMA 1.193, 100 SMA @ 1.2172 and 200 SMA @ 1.2755.

The previous day high was 1.1561 while the previous day low was 1.146. The daily 38.2% Fib levels comes at 1.1499, expected to provide support. Similarly, the daily 61.8% fib level is at 1.1522, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 1.1456, 1.1408, 1.1356
• Pivot resistance is noted at 1.1557, 1.1609, 1.1658

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