#GBPUSD @ 1.20452 weighed by safe-haven US Dollar buying in face of a banking crisis. (Pivot Orderbook analysis)

…
This is a premium post.
[s2If !current_user_can(access_s2member_level4)]Please register for PREMIUM VERSION HERE to read full post below containing analysis. In case of any error or you think you are not able to read the full post below, please email us at support#nehcap.com [lwa][/s2If] [s2If current_user_can(access_s2member_level4)]

• GBP/USD weighed by safe-haven US Dollar buying in face of a banking crisis.
• Bob Michele, JPMorgan Asset Management CIO and global head of fixed income said Credit Suisse is the tip of the iceberg.

The pair currently trades last at 1.20452.

The previous day high was 1.2204 while the previous day low was 1.2136. The daily 38.2% Fib levels comes at 1.2162, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.2178, expected to provide resistance.

GBP/USD continuation traders are in the market as renewed unease gripped world markets on Wednesday on the news that Credit Suisse’s largest investor said it could not provide the Swiss bank with more financial assistance, prompting the Swiss bank’s CEO to make new assurances on its financial strength.

Credit Suisse has been battling to recover from a string of scandals that have undermined the confidence of investors and clients and the institution´s plunging stock price has re-ignited jitters among investors about the resilience of the global banking system following the collapse of Silicon Valley Bank last week. Credit Suisse CEO Ulrich Koerner moved to calm nerves, saying the bank’s liquidity base remained strong and was well above all regulatory requirements.

However, investors are worried that a full-blown global banking crisis may be brewing with some analysts saying that Credit Suisse is the tip of the iceberg. Bob Michele, JPMorgan Asset Management CIO and global head of fixed income, says Credit Suisse shows the lagged impact of central bank tightening have caught up during an interview with Jonathan Ferro on “Bloomberg The Open,” saying that this is the tip of the iceberg with a lot more consolidation and pain to come, ´´so you put your money into the highest quality assets that you can find´´. He also says that the Federal Reserve should pause.

In this regard, concerns about the Swiss bank triggered a sharp decline in European and US bond yields as investors questioned if the Federal Reserve and other central banks can keep hiking interest rates to curb inflation. Two-year Treasury notes, which move in step with interest rate expectations, have tumbled 98 basis points in the last five days, the biggest drop since the week of Black Monday on Oct. 19, 1987. On Wednesday, they have fallen from 4.413% to pay as low as 3.72%. As recently as last week, markets braced for the return of large Fed interest rate rises but markets are now pricing in an 80% chance of a 25 basis point Federal Reserve hike next week and are pricing in a 50% chance of no change. Moreover, the December Fed funds futures, which reflect the overnight rate that banks use to lend to each other has dropped to 3.62% in a sign market expects the Fed to be cutting interest rates by year’s end, if not before.

Nevertheless, the US Dollar has rallied on safe-haven buying. DXY, an index that measures the greenback vs. a basket of currencies, vaulted 104 the figure on a tear all the way to 105.103, in turn, crushing everything in its way, including GBP, and despite the UK government´s budget.

The measures announced by Chancellor Jeremy Hunt are seen as an effort to support productivity and investment without adding strain on public finances, which would otherwise see GBP should react well. However, the risk-off themes have ignored such positive implications for Sterling so far. The Chancellor says the UK economy is on the right track and the government’s plan for the economy was “working” as he announced what he called a “budget for growth”.

Technical Levels: Supports and Resistances

GBPUSD currently trading at 1.2044 at the time of writing. Pair opened at 1.2158 and is trading with a change of -0.94 % .

The pair is trading above its 20 Daily moving average @ 1.2015, below its 50 Daily moving average @ 1.2135 , above its 100 Daily moving average @ 1.2033 and above its 200 Daily moving average @ 1.1897

The previous day high was 1.2204 while the previous day low was 1.2136. The daily 38.2% Fib levels comes at 1.2162, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.2178, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.2128, 1.2097, 1.2059
• Pivot resistance is noted at 1.2196, 1.2235, 1.2265

[/s2If]
Join Our Telegram Group