#GBPUSD @ 1.12261 The pound attempts to consolidate losses in the 1.1200 area. (Pivot Orderbook analysis)

…
This is a premium post.
[s2If !current_user_can(access_s2member_level4)]Please register for PREMIUM VERSION HERE to read full post below containing analysis. In case of any error or you think you are not able to read the full post below, please email us at support#nehcap.com [lwa][/s2If] [s2If current_user_can(access_s2member_level4)]

• The pound attempts to consolidate losses in the 1.1200 area.
• Investors scale down hopes of aggressive BoE tightening despite hot CPI data.
• GBP/USD’s decline could extend below 1.10 – ING.

The pair currently trades last at 1.12261.

The previous day high was 1.1411 while the previous day low was 1.1256. The daily 38.2% Fib levels comes at 1.1315, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.1352, expected to provide resistance.

The pound seems to be attempting to set a bottom at 1.1185 after its reversal from 1.1445 highs earlier this week. The pair dropped for the second consecutive day on Wednesday, weighed by negative inflation data and political uncertainty in the UK.

Consumer inflation accelerated beyond expectations in September, the annual CPI increased to 10.1% from 9.9% in the previous month, against market expectations of a 10.0% reading. The market, however, has scaled down hopes of an aggressive BoE rate hike to fight inflation on the back of the looming recession risks, which has hit GBP demand.

Furthermore, the turmoil in the UK government, with the ruling Tory party plotting to replace the recently elected Prime Minister Liz Truss after her tax cut fiasco is adding negative pressure on the pair.

On the other end, the sourer market mood has favored the safe-haven US dollar, which surged higher on Wednesday, underpinned by hopes of aggressive monetary tightening by the Fed and higher US bond yields.

FX analysts at ING see the pair depreciating lower, probably below 1.1000: “We still struggle to see a return to 1.15+ levels in cable, as a combination of political instability, risks of a deeper recession and smaller rate hikes by the BoE along the path of fiscal rigour – along with a strong dollar – may more than offset the benefits of quieter debt-related concerns (…) It’s too early to dismiss a return to sub-1.10 levels.”

Technical Levels: Supports and Resistances

GBPUSD currently trading at 1.1204 at the time of writing. Pair opened at 1.1318 and is trading with a change of -1.01 % .

The pair is trading above its 20 Daily moving average @ 1.1132, below its 50 Daily moving average @ 1.1485 , below its 100 Daily moving average @ 1.1822 and below its 200 Daily moving average @ 1.2455

The previous day high was 1.1411 while the previous day low was 1.1256. The daily 38.2% Fib levels comes at 1.1315, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.1352, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.1246, 1.1173, 1.1091
• Pivot resistance is noted at 1.1401, 1.1483, 1.1556

[/s2If]
Join Our Telegram Group