• GBP/USD gains traction for the sixth straight day and climbs to a two-week high.
  • The UK government’s U-turn on scraping higher tax rates continues to lift sterling.
  • The USD extends its recent sharp retracement slide and offers additional support.

The GBP/USD pair attracts some dip-buying near the 1.1280 region and turns positive for the sixth successive day on Tuesday. The momentum lifts spot prices to a two-week high, back above the 1.1400 mark during the early European session and is sponsored by a combination of factors.

The UK government's U-turn to reverse a controversial tax cut plan announced in its mini-budget last week continues to underpin the British pound. The US dollar, on the other hand, extends its recent sharp pullback from a two-decade high amid the ongoing downfall in the US Treasury bond yields and offers additional support to the GBP/USD pair.

The Bank of England reaffirmed its willingness to buy up to £5 billion of long-dated gilts and this helped drag the US Treasury bond yields further away from a multi-year top touched last week. Apart from this, the prevalent risk-on mood - as depicted by a strong rally across the global equity markets - is seen as another factor weighing on the safe-haven buck.

With the latest leg up, the GBP/USD pair confirms a breakout back above a nearly two-month-old descending trend-line resistance. This might have already set the stage for an extension of the recent recovery from an all-time low touched last Monday. In the absence of any macro data from the UK, spot prices remain at the mercy of the USD price dynamics.

Later during the early North American session, traders will take cues from the US economic docket - featuring the release of JOLTS Job Openings and Factory Orders data. This, along with speeches by FOMC members, the US bond yields and the broader risk sentiment, will drive the USD demand and provide some meaningful impetus to the GBP/USD pair.

Technical levels to watch

GBP/USD

Overview
Today last price 1.1402
Today Daily Change 0.0078
Today Daily Change % 0.69
Today daily open 1.1324
 
Trends
Daily SMA20 1.1293
Daily SMA50 1.1688
Daily SMA100 1.1968
Daily SMA200 1.2583
 
Levels
Previous Daily High 1.1335
Previous Daily Low 1.1086
Previous Weekly High 1.1235
Previous Weekly Low 1.0339
Previous Monthly High 1.1738
Previous Monthly Low 1.0339
Daily Fibonacci 38.2% 1.124
Daily Fibonacci 61.8% 1.1181
Daily Pivot Point S1 1.1162
Daily Pivot Point S2 1.0999
Daily Pivot Point S3 1.0913
Daily Pivot Point R1 1.141
Daily Pivot Point R2 1.1497
Daily Pivot Point R3 1.1659

 

 

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