#GBPUSD @ 1.11514 get a respite after diving 4% in the last four days due to the UK’s bond turmoil. (Pivot Orderbook analysis)

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• GBP/USD get a respite after diving 4% in the last four days due to the UK’s bond turmoil.
• Fed’s Mester commented that inflation is “unacceptably high” and estimates that rates will remain higher for longer.
• UK’s unemployment rate edged lower, despite increasing the number of people without a job or looking for one.

The pair currently trades last at 1.11514.

The previous day high was 1.1111 while the previous day low was 1.102. The daily 38.2% Fib levels comes at 1.1055, expected to provide support. Similarly, the daily 61.8% fib level is at 1.1076, expected to provide support.

The GBP/USD is snapping four days of consecutive losses, though it remains below 1.1186, the 20-day EMA amidst a risk-off impulse in the markets, but not in the FX space, with the greenback remaining on the backfoot. Fears of lower worldwide economic growth, and further central bank tightening, keep traders on their toes.

At the time of writing, the GBP/USD Is trading at 1.1160, above its opening price by 0.98%, after hitting a daily low of 1.0997 early during the European session. So far, US equity markets have made a U-turn, trading in the green, reflecting the sentiment improvement.

The absence of US economic data keeps traders entertained with Fed speaking, led by Cleveland’s Fed President Loretta Mester. She said that even with a large number of rate increases in 2022, the central bank has not achieved its goal and would need to press forward with tightening monetary policy. Mester commented that inflation is “unacceptably high and persistent” while reiterating that she does not expect any rate cuts by 2023.

In the meantime, last Friday’s US Nonfarm Payrolls report showed that the labor market remains tight, albeit hiring was lower than August’s figures. Of note is that the Unemployment Rate decelerated from 3.7% to 3.5%, justifying the Fed’s need for more hikes.

On the UK side, employment data was worse than estimated, as reported by the ONS, that 252K of Britons are not looking working or looking for one, while the ILO Unemployment Rate edged lower from 3.6% to 3.5%. The number of people in employment fell by 109,000 in the June-August period.

That said, sources cited by Reuters estimate that the low unemployment rate and pay rises edging higher will keep the Bank of England on its tightening cycle, as the bank scrambles to tame inflation in two-digit levels.

The UK calendar will feature GDP figures for 3-months, annual base reading, Industrial Production, and the Trade Balance. On the US front, the docket will feature Fed speaking and the Producer Price Index (PPI).

Technical Levels: Supports and Resistances

GBPUSD currently trading at 1.1171 at the time of writing. Pair opened at 1.1057 and is trading with a change of 1.03 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 1.1207, 50 SMA 1.1594, 100 SMA @ 1.1905 and 200 SMA @ 1.2526.

The previous day high was 1.1111 while the previous day low was 1.102. The daily 38.2% Fib levels comes at 1.1055, expected to provide support. Similarly, the daily 61.8% fib level is at 1.1076, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 1.1014, 1.0971, 1.0922
• Pivot resistance is noted at 1.1106, 1.1154, 1.1198

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