#GBPUSD @ 1.22238 is expected to continue its downside journey to near 1.2200 as focus shifts to US NFP data. (Pivot Orderbook analysis)

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• GBP/USD is expected to continue its downside journey to near 1.2200 as focus shifts to US NFP data.
• To tame double-digit inflation, the BOE pushed interest rates by 50 bps to 4%.
• Investors will keep an eye on US Average Hourly Earnings data for further guidance.

The pair currently trades last at 1.22238.

The previous day high was 1.2395 while the previous day low was 1.2272. The daily 38.2% Fib levels comes at 1.2348, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.2319, expected to provide resistance.

The GBP/USD pair has shown a vertical sell-off to near 1.2225 and is expected to continue its downside journey to near the round-level support of 1.2200 ahead. The Cable witnessed a massive sell-off after investors shrugged off expectations that the Federal Reserve (Fed) will pause policy tightening ahead and poured funds into the US Dollar Index (DXY). Apart from that, investors dumped the Pound Sterling despite the Bank of England (BoE) continuing its hawkish stance on interest rates.

On Thursday, the USD Index recovered firmly after building a cushion around 100.50. The extremely oversold condition of the USD Index triggered buying interest among the market participants. The USD Index soared above 101.50 and has now turned sideways below 101.40 ahead of the United States Nonfarm Payrolls (NFP) data for further guidance.

To tame the double-digit inflation figure, BOE Governor Andrew Bailey announced an interest rate hike by 50 basis points (bps), which pushed borrowing rates to 4%. The BoE was an early adopter that started contracting its monetary policy after the pandemic period and has now announced its 10th consecutive interest rate hike. However, the inflation rate is still double-digit amid rising wage rates due to squeezed labor supply. Also, the softening energy prices are offset by the rising food price index, which was recorded at 16.8% for December.

There is no denying the fact that BoE policymakers have done much with interest rates to decelerate inflation, however, the United Kingdom economy is not responding, as expected, to extreme policy tightening.

On Friday, the release of the US NFP data will be of utmost importance. According to the consensus, the United States economy has added 185K jobs in the labor market in January vs. the former release of 223K in times when labor demand is exceeding supply. The Unemployment Rate is seen at 3.6% vs. 3.5% released earlier. The catalyst that will be critically monitored by investors for further action will be the Average Hourly Earnings data.

Technical Levels: Supports and Resistances

GBPUSD currently trading at 1.2231 at the time of writing. Pair opened at 1.2374 and is trading with a change of -1.16 % .

The pair is trading below its 20 Daily moving average @ 1.2274, above its 50 Daily moving average @ 1.2188 , above its 100 Daily moving average @ 1.179 and above its 200 Daily moving average @ 1.1959

The previous day high was 1.2395 while the previous day low was 1.2272. The daily 38.2% Fib levels comes at 1.2348, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.2319, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.2299, 1.2224, 1.2177
• Pivot resistance is noted at 1.2422, 1.247, 1.2545

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