#GBPUSD @ 1.26144 slides after Senior Loan Officer Opinion Survey report shows US banks expecting tightening credit conditions. (Pivot Orderbook analysis)
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- GBP/USD slides after Senior Loan Officer Opinion Survey report shows US banks expecting tightening credit conditions.
- US Treasury bond yields continue to gain ground, undermining GBP/USD.
- The debt ceiling debate in Washington could trigger outflows towards safe-haven peers; future inflation data may benefit US Dollar.
The pair currently trades last at 1.26144.
The previous day high was 1.2652 while the previous day low was 1.2561. The daily 38.2% Fib levels comes at 1.2618, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.2596, expected to provide support.
The GBP/USD retreats after hitting a new year-to-date (YTD) high of 1.2668 after the US Federal Reserve (Fed) reported the Senior Loan Officer Opinion Survey (SLOOS), which showed that US banks are expecting tightening credit conditions. However, a looming Bank of England (BoE) monetary policy cushioned the Pound Sterling (GBP). At the time of writing, the GBP/USD is trading at 1.2618.
Wall Street’s wavered after the SLOOS report, which showed that credit conditions are tightening, and businesses’ demand for loans is weakening. Banks expect to strain standards across all loan categories on expected deterioration in credit quality, reduced risk tolerance, and concerns about funding costs, liquidity, and deposit outflows.
The GBP/USD slid after the report crossed the screens, from around 1.2640 to current exchange rates, as the greenback recovered some ground. The US Dollar Index (DXY), which tracks the performance of six currencies vs. the American Dollar (USD), rises 0.15%, at 101.370.
Meanwhile, US Treasury bond yields continued to gain ground, with the 10-year benchmark note rate at 3.520%, up seven and a half bps, undermining the GBP/USD.
Aside from this, Federal Reserve officials had begun to cross newswires, with Aaron Goolsbee from the Chicago’s Fed crossing the wires. He said the Fed would be data dependent, and that is too soon to judge rate decisions for the June meeting.
Discussions in Washington could shift market sentiment as the debt ceiling debate between the White House and the US Congress could trigger outflows toward safe-haven peers, like the Japanese Yen (JPY), the Swiss Franc (CHF), and Gold.
According to Janet Yellen, the US Treasury Secretary, there are no accessible alternatives to resolve the debt limit issue in Washington without assistance from the US Congress. In the meantime, US President Joe Biden is expected to meet lawmakers on May 9 to advance in negotiations regarding raising the ceiling.
The US economic docket will feature inflation data in the upcoming days. Any significant consumer or producer data jump could benefit the US Dollar; hence, the GBP/USD could continue to trend lower, with the pair expected to fall below 1.2600.
Earlier, the US Commerce Department revealed that Wholesale Inventories were unchanged in March, below estimates of 0.1% MoM. Annually based, inventories jumped 9.1% in March, despite the first quarter decline, as more robust US consumer spending contributed to the inventory rundown.
Technical Levels: Supports and Resistances
GBPUSD currently trading at 1.2617 at the time of writing. Pair opened at 1.2632 and is trading with a change of -0.12 % .
| Overview | Overview.1 | |
|---|---|---|
| 0 | Today last price | 1.2617 |
| 1 | Today Daily Change | -0.0015 |
| 2 | Today Daily Change % | -0.1200 |
| 3 | Today daily open | 1.2632 |
The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 1.2476, 50 SMA 1.2302, 100 SMA @ 1.2225 and 200 SMA @ 1.195.
| Trends | Trends.1 | |
|---|---|---|
| 0 | Daily SMA20 | 1.2476 |
| 1 | Daily SMA50 | 1.2302 |
| 2 | Daily SMA100 | 1.2225 |
| 3 | Daily SMA200 | 1.1950 |
The previous day high was 1.2652 while the previous day low was 1.2561. The daily 38.2% Fib levels comes at 1.2618, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.2596, expected to provide support.
Note the levels of interest below:
- Pivot support is noted at 1.2578, 1.2524, 1.2486
- Pivot resistance is noted at 1.2669, 1.2706, 1.276
| Levels | Levels.1 |
|---|---|
| Previous Daily High | 1.2652 |
| Previous Daily Low | 1.2561 |
| Previous Weekly High | 1.2652 |
| Previous Weekly Low | 1.2436 |
| Previous Monthly High | 1.2584 |
| Previous Monthly Low | 1.2275 |
| Daily Fibonacci 38.2% | 1.2618 |
| Daily Fibonacci 61.8% | 1.2596 |
| Daily Pivot Point S1 | 1.2578 |
| Daily Pivot Point S2 | 1.2524 |
| Daily Pivot Point S3 | 1.2486 |
| Daily Pivot Point R1 | 1.2669 |
| Daily Pivot Point R2 | 1.2706 |
| Daily Pivot Point R3 | 1.2760 |
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