The GBPUSD currency pair experiences upward movement on Monday, distancing itself from a low that was reached over a period of three months.

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• GBP/USD gains some positive traction on Monday and moves away from over a three-month low.

The pair currently trades last at 1.23986.

The previous day high was 1.2446 while the previous day low was 1.2379. The daily 38.2% Fib levels comes at 1.2405, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.242, expected to provide resistance.

The GBP/USD pair attracts some buying on the first day of a new week and reverses a part of Friday’s slide to the 1.2380-1.2375 area, or its lowest level since June. Spot prices currently trade around the 12400 round figure and draw some support from a softer US Dollar (USD), though any meaningful appreciating move still seems elusive.

A generally positive tone around the US equity future fails to assist the safe-haven Greenback to capitalize on its longest weekly winning streak since 2014. The USD downtick could further be attributed to some repositioning trade ahead of this week’s key central bank event risk – the outcome of the highly-anticipated two-day FOMC monetary policy meeting starting on Tuesday. The Fed is scheduled to announce its decision on Wednesday and is widely expected to leave interest rates unchanged.

The markets, however, are still pricing in the possibility of one more 25 bps lift-off in November or December. Hence, the market focus will be on the accompanying policy statement and Fed Chair Jerome Powell’s remarks at the post-meeting press conference. Investors will look for fresh cues about the Fed’s future rate-hike path, which, in turn, will play a key role in influencing the near-term USD price dynamics and help investors determine the next leg of a directional move for the GBP/USD pair.

In the meantime, diminishing odds for a more aggressive policy tightening by the Bank of England (BoE) might hold back traders from placing aggressive bullish bets around the British Pound (GBP). In fact, BoE Governor Andrew Bailey had told lawmakers that the central bank is now “much nearer” to ending its run of interest rate increases. This, along with reviving recession fears and signs that the UK labour market is cooling, might put pressure on the BoE to pause its rate-hiking cycle.

In the absence of any relevant market-moving economic releases on Monday, the aforementioned fundamental backdrop warrants some caution positioning for any further recovery. Hence, it will be prudent to wait for strong follow-through buying before confirming that the GBP/USD pair has formed a near-term bottom.

Technical Levels: Supports and Resistances

GBPUSD currently trading at 1.2397 at the time of writing. Pair opened at 1.2383 and is trading with a change of 0.11 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 1.2577, 50 SMA 1.2733, 100 SMA @ 1.2654 and 200 SMA @ 1.2433.

The previous day high was 1.2446 while the previous day low was 1.2379. The daily 38.2% Fib levels comes at 1.2405, expected to provide resistance. Similarly, the daily 61.8% fib level is at 1.242, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 1.2359, 1.2336, 1.2292
• Pivot resistance is noted at 1.2426, 1.247, 1.2494

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