#GBPUSD @ 1.21989 picks up bids to reverse the week-start pullback from monthly high. (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 picks up bids to reverse the week-start pullback from monthly high.
• Broad US Dollar retreat underpins Cable pair’s recovery ahead of the key jobs report.
• Chatters of Brexit-led labor shortage, workers’ strikes in the UK and hardships for UK PM Sunak probe GBP/USD bulls.
• BoE’s Bailey spread dovish remarks ahead of this week’s key data.

The pair currently trades last at 1.21989.

The previous day high was 1.2289 while the previous day low was 1.2172. The daily 38.2% Fib levels comes at 1.2216, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.2244, expected to provide resistance.

GBP/USD stays defensive around 1.2210, despite the downbeat week-start, as Cable traders await the key UK jobs report, up for publishing on early Tuesday. It’s worth noting that the multiple negatives surrounding the UK’s employment updates join the British political pessimism to probe the pair buyers even as the US Dollar Index (DXY) weakness underpins the recovery moves.

That said, the Financial Times (FT) quotes the latest statement from the UK in a Changing Europe and the Centre for European Reform think-tanks as it said that the post-Brexit UK economy is facing a shortfall of more than 300,000 workers as the result of ending free movement of labor with the EU.

On the same line, Reuters conveyed that teachers joining the employee strikes by joining nurses, rail workers and others in staging industrial action. “The National Education Union (NEU) said that the first strike would be on Feb. 1, a date when 100,000 public sector workers are due to strike in what could become Britain’s biggest day of coordinated industrial action for decades,” mentioned Reuters.

Acting as an extra negative for the GBP/USD price could be the political hardships for UK Prime Minister (PM) Rishi Sunak as The Telegraph noted that the UK government backed down over Online Safety Bill after the Conservative rebellion.

On Monday, Bank of England (BOE) Governor Andrew Bailey testified against the Treasury Select Committee in London while stating that inflation looked set to fall markedly this year.

It should be noted that a retreat in the US Dollar Index (DXY) could be considered a major positive for the GBP/USD prices, despite the aforementioned price-negative catalysts. However, the Cable pair traders may wait for the UK employment data for fresh impulse.

That said, the UK’s Unemployment Rate for three months to November is expected to remain unchanged at 3.7% but a likely improvement in the Average Weekly Earnings might help the GBP/USD to remain firmer.

Also read: GBP/USD Weekly Forecast: Pound Sterling looks to 1.2450 in the UK inflation week

A six-week-old horizontal resistance near 1.2345 appears a tough nut to crack for the GBP/USD bulls. Alternatively, the 100-day EMA level surrounding 1.1940 put a floor under the Cable prices.

Technical Levels: Supports and Resistances

GBPUSD currently trading at 1.2206 at the time of writing. Pair opened at 1.2195 and is trading with a change of 0.09% % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 1.209, 50 SMA 1.2051, 100 SMA @ 1.1693 and 200 SMA @ 1.1993.

The previous day high was 1.2289 while the previous day low was 1.2172. The daily 38.2% Fib levels comes at 1.2216, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.2244, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.2148, 1.2101, 1.203
• Pivot resistance is noted at 1.2266, 1.2337, 1.2384

[/s2If]
Join Our Telegram Group