#GBPUSD @ 1.13061 cheers broad US dollar weakness, cautious optimism in the market to defend buyers. (Pivot Orderbook analysis)

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• GBP/USD cheers broad US dollar weakness, cautious optimism in the market to defend buyers.
• End of UK’s month-old political turmoil, Rishi Sunak’s credibility keeps buyers hopeful.
• Downbeat PMIs, geopolitical fears concerning Russia and hawkish Fed bets test upside momentum.
• Second-tier US data can entertain intraday buyers ahead of Thursday’s US Q3 GDP.

The pair currently trades last at 1.13061.

The previous day high was 1.1409 while the previous day low was 1.1258. The daily 38.2% Fib levels comes at 1.1316, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.1352, expected to provide resistance.

GBP/USD grinds higher past 1.1300, up 0.25% intraday, as buyers cheer a softer US dollar amid hopes of the end of the UK’s political crisis during early Tuesday. Even so, a lack of major data/events and sluggish markets, not forgetting the immediate technical hurdles, challenge the pair buyers after a downbeat start to the week.

After being elected as the third British Prime Minister in less than two months, the ex-Financial Minister Rishi Sunak told the supporters that, a “profound economic challenge” looms over the UK. The policymaker also mentioned, “We now need stability and unity, and I will make it my utmost priority to bring our party and our country together.” Considering Sunak’s credibility, mainly due to his history of working in Goldman Sachs and aptly predicting the financial turmoil should Liz Truss announces her fiscal stimulus, the GBP/USD buyers are hopeful of overcoming the month-long political trauma.

Furthermore, Bank of England Deputy Governor Dave Ramsden said credibility was returning to British economic policymaking, judging by a recovery in the government bond market, which in turn helps the quote to remain mildly bid of late.

However, the downbeat UK activity numbers and mixed concerns over the Bank of England’s (BOE) next move, now that Truss-led pressure is off, appear to challenge the GBP/USD bulls. On the same line could be the hawkish Fed bets and the strong US inflation expectations.

That said, the US inflation precursors, as per the 10-year and 5-year breakeven inflation rates per the St. Louis Federal Reserve (FRED) data, rose to a two-month high in their latest readings. Further, the CME’s FedWatch Tool prints a nearly 95% chance of a 75 bps Fed rate hike in November.

Amid these plays, the US Dollar Index (DXY) remains on the back foot around 111.90 while the US 10-year Treasury yields remain pressured around 4.21%, down two basis points (bps). Further, the S&P 500 Futures fail to track Wall Street’s gains to print a mild 0.20% intraday loss by the press time.

Moving on, GBP/USD buyers need strong positives to overcome the immediate key hurdle and reverse the previous downtrend. However, the absence of Fedspeak and a light calendar may restrict the Cable pair’s moves ahead of Thursday’s US Gross Domestic Product for the third quarter (Q3).

A daily closing beyond a six-week-old resistance line, near 1.1285 by the press time, as well as the 50-DMA hurdle surrounding 1.1400, becomes necessary for the GBP/USD bulls to retake control. Otherwise, hopes of revisiting the monthly support line near 1.1085 can’t be ruled out.

Technical Levels: Supports and Resistances

GBPUSD currently trading at 1.1306 at the time of writing. Pair opened at 1.128 and is trading with a change of 0.23% % .

The pair is trading above its 20 Daily moving average @ 1.118, below its 50 Daily moving average @ 1.1413 , below its 100 Daily moving average @ 1.1771 and below its 200 Daily moving average @ 1.2407

The previous day high was 1.1409 while the previous day low was 1.1258. The daily 38.2% Fib levels comes at 1.1316, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.1352, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.1222, 1.1165, 1.1071
• Pivot resistance is noted at 1.1373, 1.1467, 1.1524

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