#GBPUSD @ 1.21923 is building strength for shifting the business above 1.2200 amid the risk-on mood. (Pivot Orderbook analysis)

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• GBP/USD is building strength for shifting the business above 1.2200 amid the risk-on mood.
• The Fed would look for a 25 bps rate hike just to maintain pressure on stubborn inflation.
• A steady BoE policy is in anticipation following the SVB collapse.

The pair currently trades last at 1.21923.

The previous day high was 1.2201 while the previous day low was 1.21. The daily 38.2% Fib levels comes at 1.2162, expected to provide support. Similarly, the daily 61.8% fib level is at 1.2138, expected to provide support.

The GBP/USD pair is gathering strength is shifting its auction above the round-level resistance of 1.2200 in the Asian session. The Cable has found support as the appeal for the US Dollar Index (DXY) is declining amid rising expectations of a less-hawkish monetary policy by the Federal Reserve (Fed).

S&P500 futures are showing significant gains in the Asian session as UOB has confirmed a buyout for Credit Suisse. This has improved the risk appetite of the market participants as investors’ confidence is getting restored. Sky News reported that under the takeover UBS will pay 3bn Swiss francs (£2.6bn) to acquire Credit Suisse. And, it has agreed to assume up to 5bn francs (£4.4bn) in losses, and 100bn Swiss francs (£88.5bn) in liquidity assistance will be available to both banks.

The USD Index is observing a restrictive upside around 103.80 as banking shakedown in the United States has faded hawkish guidance delivered by Fed chair Jerome Powell, a few weeks back. Inflation has dropped and the requirement of providing assistance to commercial banks is favoring the need for a lower interest rate hike, just to maintain pressure on stubborn inflation.

Analysts at Danske Bank see the Fed raising rates by 25 basis points (bps) despite recent turmoil amid banking sector jitters.

On the United Kingdom front, investors are awaiting the interest rate decision by the Bank of England (BoE), scheduled for Thursday. Analysts at Rabobank also see a quarter-point rate increase and warn that such a scenario is not fully priced in the interest market, “which indicates that the chance of a hold has increased following the collapse of Silicon Valley Bank (SVB).” A 25 bps rate hike by BoE Governor Andrew Bailey would push rates to 4.25%.

But before that, UK inflation data will be keenly watched. Annual headline Consumer Price Index (CPI) data is expected to decline to 9.8% from double-digit figures.

Technical Levels: Supports and Resistances

GBPUSD currently trading at 1.2197 at the time of writing. Pair opened at 1.2175 and is trading with a change of 0.18 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 1.2029, 50 SMA 1.2141, 100 SMA @ 1.2049 and 200 SMA @ 1.1892.

The previous day high was 1.2201 while the previous day low was 1.21. The daily 38.2% Fib levels comes at 1.2162, expected to provide support. Similarly, the daily 61.8% fib level is at 1.2138, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 1.2116, 1.2058, 1.2015
• Pivot resistance is noted at 1.2217, 1.2259, 1.2318

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