#GBPUSD @ 1.24975 gains strong positive traction on Wednesday and snaps a three-day losing streak. (Pivot Orderbook analysis)
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- GBP/USD gains strong positive traction on Wednesday and snaps a three-day losing streak.
- Bets for an imminent Fed rate-hike pause continue to weigh on the USD and lend support.
- The prospects for further tightening by the BoE boost the GBP and contribute to the move.
The pair currently trades last at 1.24975.
The previous day high was 1.2459 while the previous day low was 1.2392. The daily 38.2% Fib levels comes at 1.2417, expected to provide support. Similarly, the daily 61.8% fib level is at 1.2433, expected to provide support.
The GBP/USD pair catches aggressive bids following an early dip to sub-1.2400 levels and builds on its intraday positive move through the early North American session on Wednesday. Spot prices jump to 1.2470 region, or a fresh weekly high in the last hour, snapping a three-day losing streak and stalling the recent pullback from a nearly three-week high touched last Friday.
The US Dollar (USD) comes under some renewed selling pressure as traders remain uncertain over the Federal Reserve’s (Fed) rate-hike path and turns out to be a key factor acting as a tailwind for the GBP/USD pair. Last week’s dovish rhetoric by several Fed officials lifted bets for an imminent pause in the US central bank’s policy tightening cycle. That said, the recent inflation and labor market data from the US kept alive hopes for a 25 bps lift-off at the June FOMC meeting. This, in turn, leads to a modest recovery in the US Treasury bond yields, albeit fails to impress the USD bulls.
The British Pound, on the other hand, continues to be underpinned by expectations that the Bank of England (BoE) will be far more aggressive in policy tightening to contain stubbornly high inflation. Investors now expect the BoE to raise interest rates again from 4.5% to 4.75% on June 22 and see a roughly 60% chance that rate will peak at 5.5% later this year. The bets were lifted by the official data, which showed that the headline UK CPI fell less than expected in April and a closely watched measure of core price surged to a 31-year high. This is seen as another factor boosting the GBP/USD pair.
Meanwhile, investors now seem to have digested Wednesday’s disappointing release of Chinese macro data, which showed that the trade surplus sank to a 13-month low in May and fueled worries about a deeper global economic downturn. This is evident from signs of stability in the equity markets, which could dent the Greenback’s safe-haven status and supports prospects for a further intraday appreciating move for the GBP/USD pair. The positive outlook is reinforced by bullish technical indicators on the daily chart, which are still far from being in the overbought territory.
Technical Levels: Supports and Resistances
GBPUSD currently trading at 1.2465 at the time of writing. Pair opened at 1.2424 and is trading with a change of 0.33 % .
| Overview | Overview.1 | |
|---|---|---|
| 0 | Today last price | 1.2465 |
| 1 | Today Daily Change | 0.0041 |
| 2 | Today Daily Change % | 0.3300 |
| 3 | Today daily open | 1.2424 |
The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 1.2444, 50 SMA 1.2458, 100 SMA @ 1.2304 and 200 SMA @ 1.2002.
| Trends | Trends.1 | |
|---|---|---|
| 0 | Daily SMA20 | 1.2444 |
| 1 | Daily SMA50 | 1.2458 |
| 2 | Daily SMA100 | 1.2304 |
| 3 | Daily SMA200 | 1.2002 |
The previous day high was 1.2459 while the previous day low was 1.2392. The daily 38.2% Fib levels comes at 1.2417, expected to provide support. Similarly, the daily 61.8% fib level is at 1.2433, expected to provide support.
Note the levels of interest below:
- Pivot support is noted at 1.2391, 1.2358, 1.2324
- Pivot resistance is noted at 1.2458, 1.2492, 1.2525
| Levels | Levels.1 |
|---|---|
| Previous Daily High | 1.2459 |
| Previous Daily Low | 1.2392 |
| Previous Weekly High | 1.2545 |
| Previous Weekly Low | 1.2327 |
| Previous Monthly High | 1.2680 |
| Previous Monthly Low | 1.2308 |
| Daily Fibonacci 38.2% | 1.2417 |
| Daily Fibonacci 61.8% | 1.2433 |
| Daily Pivot Point S1 | 1.2391 |
| Daily Pivot Point S2 | 1.2358 |
| Daily Pivot Point S3 | 1.2324 |
| Daily Pivot Point R1 | 1.2458 |
| Daily Pivot Point R2 | 1.2492 |
| Daily Pivot Point R3 | 1.2525 |
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