#GBPUSD @ 1.13759 is likely to display a vertical downside move after surrendering the critical support of 1.1360. (Pivot Orderbook analysis)

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• GBP/USD is likely to display a vertical downside move after surrendering the critical support of 1.1360.
• Fed’s full percent rate hike will widen the Fed-BOJ policy divergence.
• UK’s labor market and growth projections are not supportive of further policy tightening.

The pair currently trades last at 1.13759.

The previous day high was 1.1461 while the previous day low was 1.1357. The daily 38.2% Fib levels comes at 1.1397, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.1421, expected to provide resistance.

The GBP/USD pair is hovering around the critical support of 1.1360 in the Asian session. The asset is expected to witness a sheer downside after dropping below the above-mentioned support on expectations of widening Federal Reserve (Fed)-Bank of England (BOE) policy divergence.

The scheduled monetary policy meeting of the Fed on Wednesday is expected to conclude with a third consecutive 75 basis points (bps) rate hike or with a higher extent along with a hawkish guidance bleak growth outlook. Price pressures have failed to display meaningful exhaustion signals led by higher-than-expected August inflation print readings for both headline Consumer Price Index (CPI) and core CPI. Therefore, the Fed is left with no other option than to paddle up the pace of hiking interest rates.

Well, there is no denying the fact that the BOE will also hike its interest rates in its monetary policy meeting scheduled on Thursday. The UK households are also facing the headwinds of forced inflated payouts. Growth prospects and labor market conditions are not lucrative for tightening the policy. In spite of that BOE Governor Andrew Bailey will swallow the bitter gulp and is expected to announce a rate hike by 50 bps. The expectations of a higher rate hike extent by the Fed are supporting the greenback bulls.

This week, the UK economy will also report the S&P Global PMI. The Manufacturing and Services PMI are seen at 47.5 and 50 respectively. A mixed performance is expected by the UK economy on the PMI front.

Technical Levels: Supports and Resistances

GBPUSD currently trading at 1.1374 at the time of writing. Pair opened at 1.1381 and is trading with a change of -0.06 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 1.1574, 50 SMA 1.1852, 100 SMA @ 1.2085 and 200 SMA @ 1.2686.

The previous day high was 1.1461 while the previous day low was 1.1357. The daily 38.2% Fib levels comes at 1.1397, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.1421, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.1338, 1.1296, 1.1234
• Pivot resistance is noted at 1.1442, 1.1504, 1.1546

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