#GBPUSD @ 115775 has slipped significantly to near 11570 on soaring UK long-run inflation expectations, Pivot Orderbook analysis

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• GBP/USD has slipped significantly to near 1.1570 on soaring UK long-run inflation expectations.
• The DXY is aiming higher despite the downbeat US ADP Employment Change.
• As per the consensus, the US ISM Manufacturing PMI is seen lower at 52.0

The pair currently trades last at 1.15775.

The previous day high was 1.1694 while the previous day low was 1.1599. The daily 38.2% Fib levels comes at 1.1635, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.1658, expected to provide resistance.

The GBP/USD pair is falling like a house of cards as the US dollar index (DXY) has reclaimed the round-level hurdle of 109.00 in the Asian session. The asset is declining towards its two-year low near 1.1500. The cable has displayed a vertical downside move after surrendering the critical support of 1.1600. Also, the asset has continued its four-day losing streak after slipping below Wednesday’s low at 1.1599.

After a former opening, the DXY is scaling higher and is expected to recapture its 19-year high at 109.46. The DXY has picked significant bids despite the downbeat US Automatic Data Processing (ADP) Employment Change data. The US economy has added 132k new jobs in the private sector. The unconventional methodology adopted by the US ADP agency to display the labor market situation more precisely didn’t result in a confident decline in the DXY.

As the Federal Reserve (Fed) already warned about softening labor market due to consecutive bumper rate hike announcements, investors didn’t go for an extreme sell-off in the DXY. Going forward, the US ISM Manufacturing PMI will be of utmost importance. The economic data is seen lower at 52.0 against the former figure of 52.8. This might have a major impact on the DXY.

Meanwhile, pound bulls are weakened over soaring long-run inflation expectations, which are expected to hit 4.8%, as per Citi. Also, public expectations for inflation over the coming 12 months rose to 6.3%. As energy and electricity prices are advancing dramatically amid political instability, inflation expectations are soaring and have crossed the Bank of England (BOE)’s long-term target of 2%.

Technical Levels: Supports and Resistances

GBPUSD currently trading at 1.1584 at the time of writing. Pair opened at 1.1622 and is trading with a change of -0.33 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 1.1942, 50 SMA 1.2013, 100 SMA @ 1.2264 and 200 SMA @ 1.2809.

The previous day high was 1.1694 while the previous day low was 1.1599. The daily 38.2% Fib levels comes at 1.1635, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.1658, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.1583, 1.1543, 1.1488
• Pivot resistance is noted at 1.1678, 1.1733, 1.1773

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