#GBPUSD @ 1.15450 lost nearly 200 pips after the US inflation data. (Pivot Orderbook analysis)

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• GBP/USD lost nearly 200 pips after the US inflation data.
• Core CPI in the US rose at a stronger pace than expected in August.
• US Dollar Index jumped above 109.00, reflecting broad dollar strength.

The pair currently trades last at 1.15450.

The previous day high was 1.171 while the previous day low was 1.1591. The daily 38.2% Fib levels comes at 1.1665, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.1637, expected to provide resistance.

GBP/USD came under heavy bearish pressure and erased nearly 200 pips in less than 30 minutes after the US inflation data. The pair was last seen losing 1.05% on a daily basis at 1.1557.

The US Bureau of Labor Statistics reported that the Core Consumer Price Index climbed to 6.3% in August from 5.9% in July. This print surpassed the market expectation of 6.1%. Although the headline CPI edged lower to 8.3% from 8.5% in the same period, it still arrived above analysts’ forecast of 8.1%.

The benchmark 10-year US Treasury bond yield is up nearly 3% on the day and the US Dollar Index is rising 1% at 109.35. According to the CME Group’s FedWatch Tool markets are currently fully pricing in a 75 basis points rate hike in September.

The hot inflation report also weighed on risk mood. Nasdaq Futures, which was up 1% earlier in the day, is now losing more than 3%.

Earlier in the day, mixed labour market data from the UK helped the British pound find demand but the reaction to the US data clearly shows that the dollar’s market valuation is the primary driver of the pair’s action.

Technical Levels: Supports and Resistances

GBPUSD currently trading at 1.1535 at the time of writing. Pair opened at 1.1686 and is trading with a change of -1.29 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 1.1713, 50 SMA 1.1911, 100 SMA @ 1.2149 and 200 SMA @ 1.2739.

The previous day high was 1.171 while the previous day low was 1.1591. The daily 38.2% Fib levels comes at 1.1665, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.1637, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.1615, 1.1544, 1.1496
• Pivot resistance is noted at 1.1734, 1.1782, 1.1853

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