#GBPUSD @ 1.12185 The pound rally fails at 1.1330 and the pair returns to 1.1220. (Pivot Orderbook analysis)

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• The pound rally fails at 1.1330 and the pair returns to 1.1220.
• Investors scale back BoE hike hopes after Truss’s demise.
• GBP/USD likely to reach 1.10 – ING.

The pair currently trades last at 1.12185.

The previous day high was 1.1358 while the previous day low was 1.1185. The daily 38.2% Fib levels comes at 1.1251, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.1292, expected to provide resistance.

The pound has given away most of the ground taken after the announcement of Prime Minister Truss’s resignation and remains practically unchanged on the daily chart.

The pair rallied to session highs at 1.1330 with the market celebrating the departure of Truss’s controversial government, to lose steam shortly afterward and return to the lower ranges of 1.1200.

The U-turn on the tax cuts plan and finally the Prime Minister’s demise has prompted investors to scale down hopes of an aggressive BoE rate hike in November. MPC member Broadbent affirmed earlier on Thursday that the bank will respond to Britain’s tax and spending policies, in a hint that interest rates might not rise as much as expected.

Truss came to power with an economics program that roiled financial markets in September, triggering a sharp sell-off on the British pound that forced the Bank of England to step in with a bond-buying program.

The tax-cuts fiasco divided the Tory party and caused the resignation of two of her ministers in less than six weeks, hurting the country’s credibility

FX analysts at ING see the current downtrend likely to extend towards 1.1000: “Political infighting and the uncertainty of policy continue to demand a risk premium for sterling, where GBP/USD could easily slip back to the bottom end of its wide 1.10-1.15 range.”

Technical Levels: Supports and Resistances

GBPUSD currently trading at 1.1229 at the time of writing. Pair opened at 1.1218 and is trading with a change of 0.1 % .

The pair is trading above its 20 Daily moving average @ 1.113, below its 50 Daily moving average @ 1.1465 , below its 100 Daily moving average @ 1.1809 and below its 200 Daily moving average @ 1.2443

The previous day high was 1.1358 while the previous day low was 1.1185. The daily 38.2% Fib levels comes at 1.1251, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.1292, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.1149, 1.1081, 1.0977
• Pivot resistance is noted at 1.1322, 1.1427, 1.1495

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