#GBPUSD @ 1.21184 is building a firm cushion around 1.2100 after a sell-off on Thursday. (Pivot Orderbook analysis)

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• GBP/USD is building a firm cushion around 1.2100 after a sell-off on Thursday.
• An upbeat UK GDP data could avoid recession fears and support the Pound Sterling.
• Fed Barkin warned about the absence of an all-round decline in inflation.

The pair currently trades last at 1.21184.

The previous day high was 1.211 while the previous day low was 1.2036. The daily 38.2% Fib levels comes at 1.2082, expected to provide support. Similarly, the daily 61.8% fib level is at 1.2064, expected to provide support.

The GBP/USD pair is building a cushion around 1.2110 in the early Tokyo session. The Cable is expected to remain volatile ahead of the release of the United Kingdom’s preliminary Gross Domestic Product (GDP) (Q4) data.

The economic data is seen at 0.4% vs. the former release of 1.9% on an annual basis. However, the GDP data could remain flat on a quarterly basis against a contraction of 0.3% disclosed in the third quarter. On a monthly basis, a contraction of 0.3% is expected by the street.

Economists at OCBC Bank cited “UK data dump on Friday is in focus especially after the UK think tank, National Institute of Economic and Social Research (NIESR) predicted that the UK economy is likely to avoid a recession this year. A stronger set of UK data print could validate the think tank’s prediction and further unwinding of GBP shorts may well keep GBP supported.”

Apart from that, the commentary from Bank of England (BoE) Governor Andrew Bailey on Thursday kept the Pound Sterling in action. BoE Bailey cited “We expect inflation to come down rapidly this year.” He sees the labor market loosening and expects it to show up more in declining vacancies and hours, rather than in higher unemployment.”

The market sentiment is quite negative as concerns about further policy tightening by the Federal Reserve (Fed) are still haunting the risk-sensitive currencies. S&P500 futures witnessed downside consecutively for the second day after Richmond Fed President Thomas Barkin raised the question that the inflation slowdown in the United States has been an outcome of a decline in the price of a few goods. An overall decline is yet to be seen, which makes the Consumer Price Index (CPI) heavily stubborn.

Concerns over further interest rate hikes pushed the US Dollar Index (DXY) to near 103.00 after a vertical fall. The yields provided on 10-year US government bonds roared firmly above 3.66%.

For further guidance, investors will keep an eye on the release of the US CPI data, which is scheduled for Tuesday. The economic data is expected to decline amid a continuation of interest rate hikes by the Fed.

Technical Levels: Supports and Resistances

GBPUSD currently trading at 1.2122 at the time of writing. Pair opened at 1.2068 and is trading with a change of 0.45 % .

The pair is trading below its 20 Daily moving average @ 1.2271, below its 50 Daily moving average @ 1.2193 , above its 100 Daily moving average @ 1.1824 and above its 200 Daily moving average @ 1.1948

The previous day high was 1.211 while the previous day low was 1.2036. The daily 38.2% Fib levels comes at 1.2082, expected to provide support. Similarly, the daily 61.8% fib level is at 1.2064, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 1.2033, 1.1998, 1.1959
• Pivot resistance is noted at 1.2107, 1.2145, 1.218

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