#GBPUSD @ 1.21542 picks up bids to snap two-day downtrend. (Pivot Orderbook analysis)

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• GBP/USD picks up bids to snap two-day downtrend.
• Fears from UK’s public sector workers’ strike challenge bulls despite broadly softer US Dollar.
• Dovish Fedspeak, market’s optimism adds strength to Cable’s recovery moves.
• US CPI for December will be crucial for near-term directions, softer print could add to weekly gains.

The pair currently trades last at 1.21542.

The previous day high was 1.2199 while the previous day low was 1.211. The daily 38.2% Fib levels comes at 1.2144, expected to provide support. Similarly, the daily 61.8% fib level is at 1.2165, expected to provide resistance.

GBP/USD buyers flex muscles around the mid-1.2100s, following the downbeat performance in the last two days, as markets await the key US Consumer Price Index (CPI) for December during early Thursday. In doing so, the Cable pair remains well-set for the biggest weekly gains since late November.

The quote’s latest weakness could be linked to the likely increase in the UK’s economic hardships due to the fears emanating from the strikes of the British public sector workers. To solve the same, UK Prime Minister Rishi Sunak eased his front to come to a mid-point but the situation didn’t improve and the unions are warning over a much bigger protest starting from February 01. “Britain’s Public and Commercial Services (PCS) union said on Wednesday 100,000 of its members across 124 government departments would take strike action on Feb. 1 in a dispute over pay, pensions and job security,” reported Reuters.

Elsewhere, the market’s cautious optimism amid the risk-positive headlines surrounding China, as well as receding fears of hawkish Fed actions seemed to have kept the GBP/USD buyers hopeful.

Recently, Federal Reserve’s Boston President Susan Collins backed the smaller rate increases while stating that she leans at this stage to a 25 bps hike. However, she also mentioned that it is very data-dependent.

On other hand, China’s total reopening and early signals of heavy holiday shopping join the chatters that the People’s Bank of China (PBOC) will adhere to rate cuts in 2023 to spread the Beijing-inspired optimism.

It should be noted that the firmer prints of equities and downbeat US Treasury yields also restricted GBP/USD downside despite not-so-positive headlines from the UK. That said, the US 10-year Treasury yields dropped nearly eight basis points (bps) 3.54% while Wall Street closed in the green.

Looking forward, GBP/USD traders are likely to witness further recovery moves amid downbeat expectations from the US CPI data, expected 6.5% YoY versus 7.1% prior. Considering this, analysts at Australia and New Zealand Banking Group (ANZ) said, “Current price action indicates that the market wants and is expecting a fairly benign data print. The consensus is that core CPI rose 0.3% m/m; we are forecasting 0.4% m/m.”

Wednesday’s Dragonfly Doji and the GBP/USD pair’s ability to remain firmer past 21-DMA, around 1.2085 by the press time, keeps buyers hopeful.

Technical Levels: Supports and Resistances

GBPUSD currently trading at 1.2148 at the time of writing. Pair opened at 1.2152 and is trading with a change of -0.03% % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 1.2096, 50 SMA 1.1984, 100 SMA @ 1.1676 and 200 SMA @ 1.201.

The previous day high was 1.2199 while the previous day low was 1.211. The daily 38.2% Fib levels comes at 1.2144, expected to provide support. Similarly, the daily 61.8% fib level is at 1.2165, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.2108, 1.2065, 1.202
• Pivot resistance is noted at 1.2197, 1.2242, 1.2285

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