#GBPUSD @ 1.11275 has not displayed a sheer response to the upbeat UK GDP data. (Pivot Orderbook analysis)

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• GBP/USD has not displayed a sheer response to the upbeat UK GDP data.
• The UK economy has delivered a growth rate of 0.2% and 4.4% on a monthly and annual basis.
• The DXY has surrendered the critical support of 112.00 amid improved risk appetite.

The pair currently trades last at 1.11275.

The previous day high was 1.1122 while the previous day low was 1.0762. The daily 38.2% Fib levels comes at 1.0984, expected to provide support. Similarly, the daily 61.8% fib level is at 1.09, expected to provide support.

The GBP/USD pair has slipped below the immediate support of 1.1150 despite upbeat UK Gross Domestic Product (GDP) data. The UK National Statistics has reported the economic activities in the UK economy have grown by 0.2% against the expectation of a decline of 0.1% on a quarterly basis. Also, the annual data has improved dramatically to 4.4% vs. the projections and the prior release of 2.9%.

The cable is auctioning in a positive trajectory despite a surprise announcement of the bond-purchase program by the Bank of England (BOE). A 13-day bond-buying program has been announced in which the BOE will purchase GBP 5 billion worth of long-dated bonds each day. At times, when the BOE is dedicated to bringing price stability, liquidity infusion could offset the impact of accelerating interest rates to some extent.

The US dollar index (DXY) witnessed a steep fall this week after soaring expectations of a slowdown in the current pace of hiking interest rates sooner. It is worth noting that Fed’s interest rate peak is not far from current interest rates at 3.-3.325% after a scrutiny of the ongoing velocity of hiking interest rates. The Fed is expected to maintain the terminal rate at 4.6% for a longer period as discussed in the reported economic projections till it find a slowdown in the price pressures for several months.

In September, the market reaction towards the higher-than-expected headline Consumer Price Index (CPI) and core CPI, despite falling gasoline prices, was extremely risk-averse. In retaliation to that, the Fed has announced a rate hike by 75 basis points (bps). Therefore, the impact of Friday’s US Personal Consumption Expenditure (PCE) is expected to remain muted. As per the consensus, the core PCE index is seen 10 bps higher at 4.7% than the prior release.

Technical Levels: Supports and Resistances

GBPUSD currently trading at 1.1142 at the time of writing. Pair opened at 1.1119 and is trading with a change of 0.21 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 1.132, 50 SMA 1.1719, 100 SMA @ 1.1989 and 200 SMA @ 1.2605.

The previous day high was 1.1122 while the previous day low was 1.0762. The daily 38.2% Fib levels comes at 1.0984, expected to provide support. Similarly, the daily 61.8% fib level is at 1.09, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 1.088, 1.0642, 1.0521
• Pivot resistance is noted at 1.1239, 1.136, 1.1598

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