#GBPUSD @ 1.24444 has faced fragile barricades around 1.2450, however, more upside seems favored. (Pivot Orderbook analysis)
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- GBP/USD has faced fragile barricades around 1.2450, however, more upside seems favored.
- US Services PMI hardly defended the contraction phase and expansion in service activity was extremely mild.
- UK households are facing the wrath of high inflation that has led to a decline in their spending for non-essential items.
The pair currently trades last at 1.24444.
The previous day high was 1.246 while the previous day low was 1.2369. The daily 38.2% Fib levels comes at 1.2403, expected to provide support. Similarly, the daily 61.8% fib level is at 1.2425, expected to provide support.
The GBP/USD pair has witnessed delicate barricades after climbing to near 1.2450 in the early European session. The Cable is expected to remain on tenterhooks as the USD Dollar Index (DXY) has attempted a recovery after dropping to near 103.81. More downside for the US Dollar Index (DXY) seems solid as the United States economy is moving towards recession.
S&P500 futures have taken nominal gains in the European session, portraying a mild recovery in the risk appetite of the market participants. US equities witnessed some selling pressure on Monday after the United States Institute of Supply Management (ISM) agency reported weaker-than-anticipated Services PMI data. The demand for US government bonds has retreated. The 10-year US Treasury yields have jumped to near 3.71%.
On Tuesday, US ISM Services PMI managed to dodge the 50.0 threshold that bifurcates expansion from the contraction phase. The Service PMI for May landed lower at 50.3 than the expectation of 51.5. This indicates that the economic indicator has hardly defended the contraction phase and expansion in service activity was extremely mild.
Last week, the US Manufacturing PMI contracted for the seventh straight month. A collaborative impact of contracting factory activity and mildly expanded service activity could push the United States economy into recession. US firms are facing the heat of higher interest rates by the Federal Reserve (Fed) and tight credit conditions by US regional banks, which has led to a decline in their overall productivity.
On the Pound Sterling front, United Kingdom’s households are facing the wrath of high inflation, which has led to a decline in their spending for non-essential items. The British Retail Consortium (BRC) said spending in its members’ stores increased 3.9% in annual terms last month, well above the 1.1% fall a year ago, however, sales were below the 5.2% rise in April, as reported by Reuters.
This might provide some relief to Bank of England (BoE) policymakers from persistence in core inflation due to labor shortages. BoE Governor Andrew Bailey is expected to raise interest rates further in June to bring down extremely stubborn inflation.
Technical Levels: Supports and Resistances
GBPUSD currently trading at 1.2446 at the time of writing. Pair opened at 1.2442 and is trading with a change of 0.03 % .
| Overview | Overview.1 | |
|---|---|---|
| 0 | Today last price | 1.2446 |
| 1 | Today Daily Change | 0.0004 |
| 2 | Today Daily Change % | 0.0300 |
| 3 | Today daily open | 1.2442 |
The pair is trading below its 20 Daily moving average @ 1.2454, below its 50 Daily moving average @ 1.2456 , above its 100 Daily moving average @ 1.2303 and above its 200 Daily moving average @ 1.1998
| Trends | Trends.1 | |
|---|---|---|
| 0 | Daily SMA20 | 1.2454 |
| 1 | Daily SMA50 | 1.2456 |
| 2 | Daily SMA100 | 1.2303 |
| 3 | Daily SMA200 | 1.1998 |
The previous day high was 1.246 while the previous day low was 1.2369. The daily 38.2% Fib levels comes at 1.2403, expected to provide support. Similarly, the daily 61.8% fib level is at 1.2425, expected to provide support.
Note the levels of interest below:
- Pivot support is noted at 1.2387, 1.2332, 1.2296
- Pivot resistance is noted at 1.2478, 1.2514, 1.2569
| Levels | Levels.1 |
|---|---|
| Previous Daily High | 1.2460 |
| Previous Daily Low | 1.2369 |
| Previous Weekly High | 1.2545 |
| Previous Weekly Low | 1.2327 |
| Previous Monthly High | 1.2680 |
| Previous Monthly Low | 1.2308 |
| Daily Fibonacci 38.2% | 1.2403 |
| Daily Fibonacci 61.8% | 1.2425 |
| Daily Pivot Point S1 | 1.2387 |
| Daily Pivot Point S2 | 1.2332 |
| Daily Pivot Point S3 | 1.2296 |
| Daily Pivot Point R1 | 1.2478 |
| Daily Pivot Point R2 | 1.2514 |
| Daily Pivot Point R3 | 1.2569 |
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