#GBPUSD @ 1.13881 is set to finish the week with more than 1.50% losses, ahead of BoE’s and Fed decisions. (Pivot Orderbook analysis)

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• GBP/USD is set to finish the week with more than 1.50% losses, ahead of BoE’s and Fed decisions.
• The University of Michigan Consumer Sentiment improved vs. the last month’s reading, while inflation expectations slid.
• UK Retail Sales added to Britain’s recession worries amidst a change of government.

The pair currently trades last at 1.13881.

The previous day high was 1.1556 while the previous day low was 1.1462. The daily 38.2% Fib levels comes at 1.1498, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.152, expected to provide resistance.

The British pound trims its earlier losses against the greenback after hitting a 37-year low around 1.1350, and recovers the 1.1400 thresholds after registering weaker-than-estimated retail sales, fueled speculations of the UK’s tapping into a recession. At the time of writing, the GBP/USD is trading at 1.1395, below its opening price, by 0.62%.

A risk-off impulse keeps most G8 currencies heavy. The greenback pared some earlier losses, as shown by the US Dollar Index, almost flat at around 109.704, yet still 0.04% down. US economic data released by the University of Michigan showed that US consumers remain slightly upbeat regarding the US economy. The Consumer Sentiment in September rose to 59.5, below estimates by a notch but better than the 58.6 achieved in August.

Joanne Hsu, director of the UoM Survey, said, “After the marked improvement in sentiment in August, consumers showed signs of uncertainty over the trajectory of the economy.” Inflation expectations in the same report for 1-year dropped to 4.6% vs. 4,8% in August.

In the meantime, US economic data released in September further cements the case for a Federal Reserve’s 75 bps rate hike in the next week. Also, sources quoted by Bloomberg commented that the US central bank might hike by a large size in November.

Elsewhere, the UK docket revealed that retail sales in August tumbled more than the estimated 0.5% contraction, falling 1.6% MoM, adding to recession fears amidst a tightening cycle by the Bank of England.

In the meantime, UK’s Prime Minister Liz Truss announced last week an energy bill that will put a lid on energy prices for two years, which would likely cost about 100 billion pounds.

The UK economic docket will feature the Bank of England’s monetary policy decision next week. Money market futures expect a 50 bps hike, but pressures are mounting that the central bank could go 75 bps. The Federal Reserve is expected to raise rates by 75 bps on the US front, with minimal chances of going a full percentage point.

Technical Levels: Supports and Resistances

GBPUSD currently trading at 1.1395 at the time of writing. Pair opened at 1.1466 and is trading with a change of -0.54 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 1.1634, 50 SMA 1.1884, 100 SMA @ 1.2118 and 200 SMA @ 1.2713.

The previous day high was 1.1556 while the previous day low was 1.1462. The daily 38.2% Fib levels comes at 1.1498, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.152, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.1433, 1.14, 1.1338
• Pivot resistance is noted at 1.1527, 1.1589, 1.1622

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