#GBPUSD @ 1.21939 comes under some selling pressure on Monday amid a goodish USD recovery. (Pivot Orderbook analysis)

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• GBP/USD comes under some selling pressure on Monday amid a goodish USD recovery.
• Bets for smaller Fed rate hikes cap the upside for the buck and lend support to the pair.
• Traders now look to BoE Governor Andrew Bailey’s speech for some meaningful impetus.

The pair currently trades last at 1.21939.

The previous day high was 1.2249 while the previous day low was 1.2151. The daily 38.2% Fib levels comes at 1.2211, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.2188, expected to provide support.

The GBP/USD pair retreats from a one-month high touched earlier this Monday and remains on the defensive through the early North American session, though lacks follow-through. The pair is currently placed around the 1.2200 mark and is weighed down by a modest US Dollar strength.

In the absence of any relevant economic data, a softer risk tone, amid worries about a deeper global economic downturn, revives demand for the safe-haven greenback. In fact, the USD Index, which measures the greenback’s performance against a basket of currencies, rebounds from a seven-month low and exerts some downward pressure on the GBP/USD pair.

The British Pound is further undermined by a bleak outlook for the UK economy, which has been fueling speculations that the Bank of England (BoE) could be nearing the end of its rate-hiking cycle. That said, expectations for a less aggressive policy tightening by the Fed cap the attempted USD recovery and act as a tailwind for the GBP/USD pair.

Investors now seem convinced that the Fed will soften its hawkish stance and have been pricing in a smaller 25 bps rate hike in February amid signs of easing inflationary pressures. The bets were lifted by the latest US CPI report released last week, which showed that consumer prices fell in December for the first time in more than 2-1/2 years.

Furthermore, a holiday in the US, in observance of Martin Luther King Jr. Day, is holding back the USD bulls from placing aggressive bets and lending support to the GBP/USD pair. That said, BoE Governor Andrew Bailey’s speech might influence the British Pound and provide some impetus ahead of the monthly UK employment details on Tuesday.

Technical Levels: Supports and Resistances

GBPUSD currently trading at 1.2194 at the time of writing. Pair opened at 1.2234 and is trading with a change of -0.33 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 1.2088, 50 SMA 1.2038, 100 SMA @ 1.1688 and 200 SMA @ 1.1997.

The previous day high was 1.2249 while the previous day low was 1.2151. The daily 38.2% Fib levels comes at 1.2211, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.2188, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 1.2174, 1.2113, 1.2076
• Pivot resistance is noted at 1.2272, 1.2309, 1.237

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