#GBPUSD @ 1.14308 gains some positive traction on Tuesday, though the uptick lacks bullish conviction. (Pivot Orderbook analysis)

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• GBP/USD gains some positive traction on Tuesday, though the uptick lacks bullish conviction.
• A goodish USD rebound from a one-week low turns out to be a key factor capping the upside.
• Any meaningful downfall seems unlikely ahead of the FOMC and the BoE meetings this week.

The pair currently trades last at 1.14308.

The previous day high was 1.1442 while the previous day low was 1.1355. The daily 38.2% Fib levels comes at 1.1409, expected to provide support. Similarly, the daily 61.8% fib level is at 1.1389, expected to provide support.

The GBP/USD pair builds on the previous day’s recovery move from the vicinity of mid-1.1300s, or its lowest level since 1985 and edges higher through the first half of trading on Tuesday. The pair stick to modest intraday gains through the early European session, though seems to struggle to capitalize on the move beyond mid-1.1400s and retreats a few pips from the daily peak.

A combination of factors assists the US dollar to attract some dip-buying following an early slide to a one-week low, which, in turn, acts as a headwind for the GBP/USD pair. Expectations that the Federal Reserve will stick to its faster rate-hiking cycle to tame inflation remain supportive of elevated US Treasury bond yields. In fact, the US central bank is widely expected to deliver another supersized 75 bps rate hike at the end of a two-day meeting on Wednesday.

Furthermore, the markets have been pricing in a small chance of a full 100 bps lift-off, which remains supportive of elevated US Treasury bond yields. The yield on the rate-sensitive two-year US government bond rose to its highest level since November 2007 and the 10-year Treasury note reached a level not seen since April 2011 on Monday. Apart from this, growing recession fears lend support to the safe-haven greenback and also contribute to capping the GBP/USD pair.

Market participants also seem reluctant to place aggressive bullish bets around the British pound amid a bleak outlook for the UK economy. This, to a larger extent, overshadows the prospects for more aggressive rate hikes by the Bank of England, which, so far, has failed to impress bulls or provide any meaningful impetus to the GBP/USD pair. The downside, however, seems cushioned as traders might prefer to move to the sidelines ahead of the key central bank event risks.

The Fed is scheduled to announce its monetary policy decision at the end of a two-day meeting on Wednesday. This will be followed by the BoE meeting on Thursday, which should help determine the next leg of a directional move for the GBP/USD pair. In the meantime, traders on Tuesday might take cues from the US housing market data, which along with the US bond yields and the broader risk sentiment, will drive the USD demand and provide some impetus to the major.

Technical Levels: Supports and Resistances

GBPUSD currently trading at 1.1435 at the time of writing. Pair opened at 1.1424 and is trading with a change of 0.1 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 1.1597, 50 SMA 1.1862, 100 SMA @ 1.2096 and 200 SMA @ 1.2695.

The previous day high was 1.1442 while the previous day low was 1.1355. The daily 38.2% Fib levels comes at 1.1409, expected to provide support. Similarly, the daily 61.8% fib level is at 1.1389, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 1.1372, 1.132, 1.1285
• Pivot resistance is noted at 1.146, 1.1495, 1.1547

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