#GBPUSD @ 1.20742 attracts some dip-buying on Tuesday and turns positive for the second straight day. (Pivot Orderbook analysis)

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• GBP/USD attracts some dip-buying on Tuesday and turns positive for the second straight day.
• The latest optimism over a new Brexit deal underpins the British Pound and lends support.
• A modest USD contributes to the uptick, though hawkish Fed expectations could cap gains.

The pair currently trades last at 1.20742.

The previous day high was 1.2066 while the previous day low was 1.1922. The daily 38.2% Fib levels comes at 1.2011, expected to provide support. Similarly, the daily 61.8% fib level is at 1.1977, expected to provide support.

The GBP/USD pair reverses an intraday dip to the 1.2025 area and turns positive for the second straight day on Tuesday. The momentum lifts spot prices to a four-day high during the first half of the European session, with bulls now awaiting a sustained move beyond the 1.2100 round-figure mark.

The British Pound continues to draw support from the optimism over the confirmation of a final deal on the Northern Ireland protocol between the UK and EU. Apart from this, rising bets for additional rate hikes by the Bank of England (BoE), along with the emergence of some US Dollar selling, lend support to the GBP/USD pair. The upside, however, remains capped amid reports that the former UK Prime Minister Borish Johnson asked the Democratic Unionist Party (DUP) leaders to be cautious and think hard before backing the “Windsor framework”.

Furthermore, a combination of factors should act as a tailwind for the buck and further contribute to keeping a lid on GBP/USD pair, at least for now. Expectations that the Federal Reserve will stick to its hawkish stance for longer to tame stubbornly high inflation triggers a fresh leg up in the US Treasury bond yields. Moreover, a weaker risk tone – amid looming recession risks and geopolitical tensions – could lend support to the safe-haven Greenback. This, in turn, warrants some caution before placing aggressive bullish bets around the major.

Market participants now look forward to speeches by BoE officials – Deputy Governor Jon Cunliffe, Chief Economist Huw Pill and Monetary Policy Committee member Catherine Mann. Later during the early North American session, traders will take cues from the US economic docket, featuring the release of Regional Manufacturing PMIs and the Conference Board’s Consumer Confidence Index. This, along with the US bond yields and the broader market risk sentiment, should influence the USD price dynamics and provide some impetus to the GBP/USD pair.

Technical Levels: Supports and Resistances

GBPUSD currently trading at 1.2081 at the time of writing. Pair opened at 1.2058 and is trading with a change of 0.19 % .

The pair is trading below its 20 Daily moving average @ 1.2094, below its 50 Daily moving average @ 1.2147 , above its 100 Daily moving average @ 1.1951 and above its 200 Daily moving average @ 1.1928

The previous day high was 1.2066 while the previous day low was 1.1922. The daily 38.2% Fib levels comes at 1.2011, expected to provide support. Similarly, the daily 61.8% fib level is at 1.1977, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 1.1965, 1.1872, 1.1821
• Pivot resistance is noted at 1.2109, 1.2159, 1.2252

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