#GBPUSD @ 1.18536 edges higher on Tuesday amid subdued USD demand, though lacks bullish conviction. (Pivot Orderbook analysis)

…
This is a premium post.
[s2If !current_user_can(access_s2member_level4)]Please register for PREMIUM VERSION HERE to read full post below containing analysis. In case of any error or you think you are not able to read the full post below, please email us at support#nehcap.com [lwa][/s2If] [s2If current_user_can(access_s2member_level4)]

• GBP/USD edges higher on Tuesday amid subdued USD demand, though lacks bullish conviction.
• China’s COVID-19 woes, geopolitical risks should limit any meaningful downside for the greenback.
• A bleak outlook for the UK economy undermines the Sterling and contributes to capping the pair.

The pair currently trades last at 1.18536.

The previous day high was 1.1902 while the previous day low was 1.1779. The daily 38.2% Fib levels comes at 1.1826, expected to provide support. Similarly, the daily 61.8% fib level is at 1.1855, expected to provide resistance.

The GBP/USD pair struggles to capitalize on its modest intraday gains and retreats a few pips from the daily high, though lacks follow-through. The pair is currently placed just below the mid-1.1800s, up around 0.20% for the day, and remains at the mercy of the US Dollar price dynamics.

The USD Index, which measures the greenback’s performance against a basket of currencies, eases from over a one-week high touched on Monday and acts as a tailwind for the GBP/USD pair. Apart from this, expectations that the Bank of England will continue raising rates to combat stubbornly high inflation offer additional support to the Sterling. That said, any meaningful upside seems elusive, warranting some caution before placing aggressive bullish bets around the major.

A bleak outlook for the UK economy might continue to undermine the British Pound and cap gains for the GBP/USD pair. It is worth mentioning that the UK Office for Budget Responsibility (OBR) now projects the UK GDP to slump by 1.4% next year as compared to a growth of 1.8% forecast in March. Furthermore, the worsening COVID-19 situation in China, along with geopolitical risks, should lend support to the buck and contribute to keeping a lid on the major, at least for now.

There isn’t any major market-moving economic data due for release from the UK on Tuesday, leaving the GBP/USD pair at the mercy of the USD price dynamics. Later during the early North American session, traders will take cues from the release of the Richmond Manufacturing Index from the US. This, along with a scheduled speech by Cleveland Fed President Loretta Mester, will drive the USD demand and allow traders to grab short-term opportunities around the major.

Technical Levels: Supports and Resistances

GBPUSD currently trading at 1.1838 at the time of writing. Pair opened at 1.182 and is trading with a change of 0.15 % .

The pair is trading above its 20 Daily moving average @ 1.1611, above its 50 Daily moving average @ 1.1372 , above its 100 Daily moving average @ 1.1642 and below its 200 Daily moving average @ 1.2215

The previous day high was 1.1902 while the previous day low was 1.1779. The daily 38.2% Fib levels comes at 1.1826, expected to provide support. Similarly, the daily 61.8% fib level is at 1.1855, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.1765, 1.171, 1.1642
• Pivot resistance is noted at 1.1888, 1.1956, 1.2011

[/s2If]
Join Our Telegram Group