#GBPUSD @ 1.11420 A combination of factors prompts aggressive selling around on the last day of the week. (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)]

• A combination of factors prompts aggressive selling around GBP/USD on the last day of the week.
• The dismal UK macro data weigh on sterling and exert pressure amid resurgent USD demand.
• Aggressive Fed rate hike bets continue to push the US bond yields higher and underpin the buck.
• Diminishing odds for a full 100 bps BoE rate hike in November support prospects for further losses.

The pair currently trades last at 1.11420.

The previous day high was 1.1337 while the previous day low was 1.1171. The daily 38.2% Fib levels comes at 1.1274, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.1235, expected to provide resistance.

The GBP/USD pair continues losing ground through the early North American session and dives to a fresh weekly low, around the 1.1060-1.1065 region in the last hour.

The sentiment surrounding the British pound remains bearish amid growing worries about a deeper economic downturn and the cost-of-living crisis. The fears were further fueled by Friday’s disappointing release of the UK Retail Sales figures, which suggests that consumers are feeling the pinch of high inflation.

Apart from this, the relentless US dollar buying exerts additional downward pressure on the GBP/USD pair and contributes to the ongoing depreciating move. In fact, the USD Index, which measures the greenback’s performance against a basket of currencies, rallies back closer to the monthly high and is supported by a combination of factors.

The continuous rise in the US Treasury bond yields, bolstered by hawkish Fed expectations, turns out to be a key factor pushing the greenback higher. The overnight hawkish remarks by Philadelphia Fed President Patrick Harker reaffirmed bets for another supersized rate hike in November. This, in turn, lifts the yield on the benchmark 10-year US government bond to its highest level since the 2008 financial crisis.

This, along with a weaker risk tone, underpins the safe-haven buck. This, in turn, suggests that the path of least resistance for the GBP/USD pair is to the downside amid diminishing odds for a full 100 bps rate increase by the Bank of England in November. Hence, a subsequent decline, back towards the 1.1000 psychological mark, remains a distinct possibility.

Technical Levels: Supports and Resistances

GBPUSD currently trading at 1.1074 at the time of writing. Pair opened at 1.123 and is trading with a change of -1.39 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 1.1128, 50 SMA 1.1445, 100 SMA @ 1.1795 and 200 SMA @ 1.2431.

The previous day high was 1.1337 while the previous day low was 1.1171. The daily 38.2% Fib levels comes at 1.1274, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.1235, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.1155, 1.108, 1.099
• Pivot resistance is noted at 1.1321, 1.1412, 1.1486

[/s2If]
Join Our Telegram Group