#GBPUSD @ 1.12787 The pound retreats below 1.1300 after failure at the 1.1400 area. (Pivot Orderbook analysis)

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• The pound retreats below 1.1300 after failure at the 1.1400 area.
• Investors welcome Risi Sunak’s victory.
• GBP/USD is aiming to 1.11/1.12 if 1.1400 resistance holds – Scotiabank.

The pair currently trades last at 1.12787.

The previous day high was 1.1315 while the previous day low was 1.106. The daily 38.2% Fib levels comes at 1.1218, expected to provide support. Similarly, the daily 61.8% fib level is at 1.1158, expected to provide support.

The pound is depreciating moderately on Monday, despite the initial positive reaction to the news about the election of Rishi Sunak as the next Prime Minister.

The pair was rejected at the 1.1400 area and has been losing ground through the day to consolidate below 1.13 during the afternoon US trading session..

News that former PM Boris Jonson retired from the Tory race to Downing Street, leaving the doors open for the market candidate, Rishi Sunak, triggered an immediate bullish reaction on the GBP and pushed gilts higher in early trading.

The positive reaction, however, was short-lived and the pound lost traction as soon as the market came to terms with the challenges ahead for the UK economy. The soaring inflation coupled with the gloomy growth forecasts are likely to maintain GBP longs on check for some time.

Failure to breach 1.14 will pull the pair to the 1.12/1.11 area, according to FX analysts at Scotiabank: “A break above the 1.1395/1.1400 area could change short-term dynamics and put the pound on course for a 1.15/1.17 test (…)If the 1.1395/1.1400 resistance holds, GBP/USD may slip back to 1.11/1.12.”

Technical Levels: Supports and Resistances

GBPUSD currently trading at 1.1279 at the time of writing. Pair opened at 1.13 and is trading with a change of -0.19 % .

The pair is trading above its 20 Daily moving average @ 1.115, below its 50 Daily moving average @ 1.1429 , below its 100 Daily moving average @ 1.1784 and below its 200 Daily moving average @ 1.2419

The previous day high was 1.1315 while the previous day low was 1.106. The daily 38.2% Fib levels comes at 1.1218, expected to provide support. Similarly, the daily 61.8% fib level is at 1.1158, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 1.1135, 1.097, 1.0881
• Pivot resistance is noted at 1.139, 1.148, 1.1645

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