#GBPUSD @ 1.11516 attracts some buying for the second successive day amid a modest USD downtick. (Pivot Orderbook analysis)

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• GBP/USD attracts some buying for the second successive day amid a modest USD downtick.
• The risk-on impulse undermines the safe-haven buck and offers some support to the major.
• Aggressive Fed rate hike bets should limit the USD losses as the focus remains on the US CPI.
• Confusion over the BoE’s emergency bond-buying program further warrants caution for bulls.

The pair currently trades last at 1.11516.

The previous day high was 1.1134 while the previous day low was 1.0924. The daily 38.2% Fib levels comes at 1.1054, expected to provide support. Similarly, the daily 61.8% fib level is at 1.1004, expected to provide support.

The GBP/USD pair attracts some buying in the vicinity of the 1.1050 area on Thursday and hits a fresh daily high during the first half of the European session. The pair is currently trading just above the mid-1.1100s, up for the second straight day and might be looking to build on the previous day’s goodish rebound from a nearly two-week low.

The US dollar edges lower for the second straight day and turns out to be a key factor lending support to the GBP/USD pair. A recovery in the global risk sentiment – as depicted by a generally positive tone around the equity markets – is undermining the safe-haven greenback. Apart from this, the USD downtick lacks any obvious catalyst and is likely to remain limited amid hawkish Fed expectations.

The markets seem convinced that the US central bank will stick to its aggressive policy tightening path and have been pricing in another supersized 75 bps rate hike in November. The bets were reaffirmed by the FOMC meeting minutes released on Wednesday, which showed that officials were committed to raising interest rates to curb inflation. This remains supportive of elevated US Treasury bond yields.

Hence, the market focus remains glued to the release of the latest US consumer inflation figures, due later during the early North American session. The crucial US CPI report will be looked upon for clues about the size of the Fed’s next interest rate hike. This, in turn, will play a key role in influencing the near-term USD price dynamics and provide a fresh directional impetus to the GBP/USD pair.

In the meantime, the fact that the Bank of England could end its program of temporary gilt purchases on Friday could act as a headwind for sterling amid concerns about the UK government’s fiscal plans. It is worth mentioning that the new UK government said that it would not reverse its vast tax cuts or reduce public spending, warranting caution before placing bullish bets around the GBP/USD pair.

Technical Levels: Supports and Resistances

GBPUSD currently trading at 1.1128 at the time of writing. Pair opened at 1.1102 and is trading with a change of 0.23 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 1.1158, 50 SMA 1.1549, 100 SMA @ 1.1875 and 200 SMA @ 1.2501.

The previous day high was 1.1134 while the previous day low was 1.0924. The daily 38.2% Fib levels comes at 1.1054, expected to provide support. Similarly, the daily 61.8% fib level is at 1.1004, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 1.0972, 1.0843, 1.0762
• Pivot resistance is noted at 1.1183, 1.1263, 1.1393

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