#GBPUSD @ 1.08083 extends Friday’s south-run to refresh multi-year low. (Pivot Orderbook analysis)

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• GBP/USD extends Friday’s south-run to refresh multi-year low.
• Discomfort for UK Chancellor’s latest speech, fears of recession weigh on the pair.
• Uncertainty surrounding BOE’s next move versus hawkish Fed pleases sellers.
• Risk catalysts are the key for immediate directions, counter-trend traders may seek opportunities but should remain cautious.

The pair currently trades last at 1.08083.

The previous day high was 1.1274 while the previous day low was 1.084. The daily 38.2% Fib levels comes at 1.1006, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.1108, expected to provide resistance.

GBP/USD takes offers to drop to the lowest levels since 1985, to 1.0780 during Monday’s Asian session, as the UK’s economic challenges and the fears surrounding the Bank of England’s (BOE) join the broad US dollar strength to favor bears. In doing so, the Cable pair ignores recent efforts from the British policymakers to please voters with the fiscal stimulus.

British Finance Minister (FinMin) Kwasi Kwarteng’s failed attempt to please defend the fiscal expansion amid fears of more inflation seem to weigh on the GBP/USD of late. British FinMin Kwarteng said on Sunday that he was focused on boosting longer-term growth, not on short-term market moves, when challenged over the sharp fall in sterling and bond prices following his first fiscal statement, reported Reuters. On different news, Reuters also reported that Keir Starmer, leader of Britain’s Labour Party, termed the UK government’s tax cuts are only helping the wealthy people and pledged to reverse the abolition of the top rate of income tax.

Elsewhere, strong US PMIs, the escalation in the Russia-Ukraine tension and hawkish central bankers propelled the US dollar.

On Friday, US S&P Global PMIs, on the other hand, were encouraging as the Manufacturing gauge rose to 51.8 from 51.5, while its services counterpart recovered from 44.6 to 49.3 for September. Following that, Fed Chairman Jerome Powell said on Friday, “We are committed to using our tools.” Following him, Fed Vice Chair Lael Brainard mentioned that inflation is very high and is hitting low-income families ‘hard’. During the weekend, Atlanta Federal Reserve President Raphael Bostic said that he still believes the central bank can tame inflation without substantial job losses given the economy’s continued momentum, reported Reuters while quoting the Fed policymaker’s interview on CBS’ “Face the Nation”.

On a different page, Ukraine President Zelenskiy was last heard saying that maybe ”Putin’s nuclear threats were a bluff, but now, it could be a reality” as per a CBS interview. Meanwhile, the United States warned of “catastrophic consequences” if Moscow were to use nuclear weapons in Ukraine after Russia’s Foreign Minister said regions holding widely-criticized referendums would get full protection if annexed by Moscow.

Although the GBP/USD bears are likely to keep the reins, Friday’s final readings of the UK’s Q2 Gross Domestic Product (GDP) and speeches from Fed Chair Powell will be crucial for the pair traders to watch for clear directions during the week.

Unless crossing the year 2020 low near 1.1410, the GBP/USD bears are likely approaching the year 1985 low surrounding 1.0520.

Technical Levels: Supports and Resistances

GBPUSD currently trading at 1.0782 at the time of writing. Pair opened at 1.086 and is trading with a change of -0.72 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 1.1475, 50 SMA 1.1808, 100 SMA @ 1.2045 and 200 SMA @ 1.2654.

The previous day high was 1.1274 while the previous day low was 1.084. The daily 38.2% Fib levels comes at 1.1006, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.1108, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.0708, 1.0557, 1.0274
• Pivot resistance is noted at 1.1143, 1.1426, 1.1577

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