#GBPUSD @ 1.20270 finds interest around 1.2000 as the USD Index is demonstrating signs of volatility contraction. (Pivot Orderbook analysis)

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• GBP/USD finds interest around 1.2000 as the USD Index is demonstrating signs of volatility contraction.
• Upbeat forward demand and higher prices paid by producers indicate a rebound in US inflation.
• BoE Bailey reiterated that the UK labor market is extremely tight.

The pair currently trades last at 1.20270.

The previous day high was 1.2143 while the previous day low was 1.2027. The daily 38.2% Fib levels comes at 1.2071, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.2099, expected to provide resistance.

The GBP/USD pair has sensed buying interest after a marginal correction to near 1.2000 in the early Asian session. The Cable is still inside the woods amid a mixed market mood. The US Dollar Index (DXY) is looking to sustain its auction above the 104.00 support after a recovery move from below 103.70 as the United States ISM Manufacturing PMI gamut conveyed a rebound in the inflationary pressures.

S&P500 futures witnessed pressure as investors are still struggling to ignore fears of more rates from the Federal Reserve (Fed). Hawkish commentaries delivered by Fed policymakers fueled US Treasury yields. The return offered on 10-year US government bonds jumped to 4%.

Minneapolis Fed President Neel Kashkari reiterated on Wednesday that inflation in the US is still very high and that their job is to bring it down, as reported by Reuters. He further added that he is open-minded on a 25 basis points (bps) hike versus a 50 bps increase.

Considering the whole US ISM Manufacturing PMI (Feb) gamut, it would be appropriate to consider a rebound in the US Consumer Price Index (CPI) as forward demand and prices paid by producers have skyrocketed.

The ISM Manufacturing New Orders Index accelerated to 47.0 from the expectations of 43.7 and the former release of 42.5. And the Manufacturing Price Paid climbed to 51.3 vs. the consensus of 45.0 and the former release of 44.5. Higher prices paid by manufacturers will be added to the goods offered by them and will amp up the inflationary pressures.

Ambiguous commentary from Bank of England (BoE) Governor Andrew Bailey has pushed the Pound Sterling inside the woods. An absence of clear guidance on interest rates kept investors on the sidelines. BoE Bailey said that some further increase in bank rates may turn out to be appropriate but added that nothing is decided, as reported by Reuters. However, he reiterated that the United Kingdom’s labor market is extremely tight.

Technical Levels: Supports and Resistances

GBPUSD currently trading at 1.2024 at the time of writing. Pair opened at 1.2027 and is trading with a change of -0.02 % .

The pair is trading below its 20 Daily moving average @ 1.2079, below its 50 Daily moving average @ 1.2144 , above its 100 Daily moving average @ 1.1961 and above its 200 Daily moving average @ 1.1925

The previous day high was 1.2143 while the previous day low was 1.2027. The daily 38.2% Fib levels comes at 1.2071, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.2099, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.1988, 1.1949, 1.1872
• Pivot resistance is noted at 1.2105, 1.2182, 1.2221

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