#GBPUSD @ 1.17275 GBPUSD catches fresh bids on Tuesday amid broad-based US Dollar weakness. (Pivot Orderbook analysis)

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• GBPUSD catches fresh bids on Tuesday amid broad-based US Dollar weakness.
• Bets for less aggressive rate hikes by the Federal Reserve weigh on the buck.
• Stronger UK wage growth data underpins the Sterling and remains supportive.
• A move beyond 1.1860 should pave the way for additional gains for GBPUSD.

The pair currently trades last at 1.17275.

The previous day high was 1.1832 while the previous day low was 1.171. The daily 38.2% Fib levels comes at 1.1757, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.1786, expected to provide resistance.

The GBPUSD pair regains positive traction on Tuesday and maintains its bid tone through the first half of the European session. The pair is currently placed around the 1.1860 region, or its highest level since August 26.

A combination of factors drags the US Dollar to a fresh three-month low, which, in turn, is seen acting as a tailwind for the GBPUSD pair. The softer US consumer inflation figures for October released last week fueled speculations for a less aggressive policy tightening by the Federal Reserve. In fact, Fed fund futures are currently pricing in over a 90% chance of a 50 bps rate increase at the next FOMC meeting in December. The prospects for smaller rate hikes contribute to the ongoing slide in the US Treasury bond yields and continue to weigh on the greenback. Apart from this, a generally positive tone around the equity markets further undermines the safe-haven buck.

The British Pound, on the other hand, benefits from stronger-than-expected UK wage growth data. The UK Office for National Statistics reported that the Average Earnings Excluding Bonuses rose 5.7% from 5.5%, beating estimates for an uptick to 5.6%. Including bonuses, wages rose by 6.0% as compared to the forecast of 5.9%. This adds to pressure on the Bank of England to continue raising borrowing costs and helps offset a rather weak UK employment data. Britain’s jobless rate unexpectedly edged up to 3.6% during the three months to September. Adding to this, the number of people claiming unemployment-related benefits came in at 3.3K against a fall of 12.6K estimated.

The market focus now shifts to the latest UK consumer inflation report, which is due for release on Wednesday and is expected to accelerate to 10.7% in October. Investors will further take cues from the BoE’s Monetary Policy Report Hearings on Wednesday. Apart from this, UK Chancellor Jeremy Hunt’s Autumn Statement on Thursday. This will play a key role in influencing the sentiment surrounding the Sterling and provide a fresh directional impetus to the GBPUSD pair. In the meantime, Tuesday’s US macro data – the Empire State Manufacturing Index and Producer Price Index (PPI) – will be looked upon for some trading opportunities later during the early North American session.

From a technical perspective, the emergence of fresh buying on Tuesday adds credence to last week’s sustained breakout through the 100-day SMA and supports prospects for additional gains. That said, it will still be prudent to wait for some follow-through buying beyond the 1.1850-1.1860 region before placing aggressive bullish bets around the GBPUSD pair.

On the flip side, the 1.1800 round-figure mark now seems to protect the immediate downside. Any subsequent fall might attract some buyers near the daily swing low, around the 1.1740 region. This, in turn, should help limit the downside near the 1.1710-1.1700 area. The latter should act as a strong base for the GBPUSD pair, which if broken might negate the positive outlook.

Technical Levels: Supports and Resistances

GBPUSD currently trading at 1.1848 at the time of writing. Pair opened at 1.1755 and is trading with a change of 0.79 % .

The pair is trading above its 20 Daily moving average @ 1.1461, above its 50 Daily moving average @ 1.1342 , above its 100 Daily moving average @ 1.1655 and below its 200 Daily moving average @ 1.2257

The previous day high was 1.1832 while the previous day low was 1.171. The daily 38.2% Fib levels comes at 1.1757, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.1786, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.1699, 1.1643, 1.1577
• Pivot resistance is noted at 1.1822, 1.1888, 1.1944

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