#GBPUSD @ 1.21449 struggles to extend the previous day’s gains amid sluggish markets. (Pivot Orderbook analysis)

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• GBP/USD struggles to extend the previous day’s gains amid sluggish markets.
• Hopes of overcoming labor crisis, US Dollar pullback underpin bullish bias.
• Expectations favoring positive surprise from US inflation, dovish concerns over BoE probe Cable buyers.
• Upbeat UK jobs report may offer intermediate strength to GBP/USD but major attention should be given to US CPI.

The pair currently trades last at 1.21449.

The previous day high was 1.2152 while the previous day low was 1.2031. The daily 38.2% Fib levels comes at 1.2106, expected to provide support. Similarly, the daily 61.8% fib level is at 1.2077, expected to provide support.

GBP/USD bulls take a breather around mid-1.2100s heading into Tuesday’s London open, after posting the biggest daily jump in a month. In doing so, the Cable pair fails to cheer the US Dollar’s weakness as traders seem cautious ahead of the UK jobs report.

The cause for the GBP/USD traders’ anxiety ahead of the monthly employment report could be linked to the headlines suggesting an end to the UK bus drivers’ strikes and an extended version of the medical staff’s agitation. Also, workers’ associations at major retailers also plan to stage an agitation in the UK and highlight the grim conditions amid rallying inflation, mainly due to a downbeat jump in the payout.

It should be noted that the cautious optimism surrounding the Bank of England’s (BoE) next move also caps the GBP/USD price. That said, the latest Reuters poll said that the Bank of England to lift the bank rate 25 basis points to 4.25% in March and then pause. On the same line, BoE policymaker Jonathan Haskel cited a rise in inactivity in the UK labor market. BoE’s Haskel also mentioned, “I would prefer to make policy with much more attention on the data flow over the next few months.”

On the other hand, downbeat prints of the US inflation expectations contrast with the hawkish Fed speak to challenge the market moves. Further weighing on the sentiment and putting a floor on the GBP/USD price are the hopes of positive surprise from the US inflation and fresh US-China jitters add strength to the mild pessimism.

That said, the US inflation expectations, as per the 10-year and 5-year breakeven inflation rates from the St. Louis Federal Reserve (FRED) eased from monthly highs to 2.31% and 2.44% at the latest. Even so, Fed Governor Michelle Bowman said on Monday that the Federal Reserve will need to continue to raise interest rates in order to get them to a level high enough to bring inflation back down to the central bank’s target rate, per Reuters.

Elsewhere, fresh fears of the US-China tension over the balloon shooting also challenge the sentiment and probe the GBP/USD buyers. US Congress will take a bipartisan look at unidentified aerial objects that have made their way into U.S. and Canadian airspace, and why they were not found sooner,” said US Senate Majority Leader Chuck Schumer. It’s worth noting that a US Military General previously ruled out odds favoring the likely hand of China in the “unidentified objects” which were shot down during the weekend.

Against this backdrop, the S&P 500 Futures remain indecisive following the biggest daily jump of the month while the US 10-year Treasury bond yields drop nearly two basis points to 3.69% at the latest, after reversing from a one-month high the previous day. Further, the US Dollar Index (DXY) remains pressured while equities in the Asia-Pacific region trade mixed at the latest.

Looking forward, a likely improvement in the UK’s Average Earnings Excluding Bonus could join the no change in Unemployment Rate to offer intermediate pleasure to the GBP/USD buyers. However, the Cable pair’s further upside hinges on how well the US Consumer Price Index (CPI) data for January crosses the market forecast of 6.2% YoY versus 6.5% prior.

GBP/USD pair’s successful trading above the 100-day Exponential Moving Average (EMA), around 1.2040 by the press time, keeps buyers hopeful of overcoming the 200-day EMA resistance of around 1.2140.

Technical Levels: Supports and Resistances

GBPUSD currently trading at 1.2146 at the time of writing. Pair opened at 1.2138 and is trading with a change of 0.07% % .

The pair is trading below its 20 Daily moving average @ 1.2254, below its 50 Daily moving average @ 1.2186 , above its 100 Daily moving average @ 1.1859 and above its 200 Daily moving average @ 1.1944

The previous day high was 1.2152 while the previous day low was 1.2031. The daily 38.2% Fib levels comes at 1.2106, expected to provide support. Similarly, the daily 61.8% fib level is at 1.2077, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 1.2062, 1.1986, 1.1941
• Pivot resistance is noted at 1.2183, 1.2228, 1.2304

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