• GBP/USD staged a modest bounce from the 1.3200 neighbourhood, though lacked follow-through.
  • Hawkish Fed expectations underpinned the greenback and capped gains amid Brexit uncertainties.
  • Bears might wait for a sustained break below the 1.3200 mark before positioning for further losses.

The GBP/USD pair now seems to have entered a bearish consolidation phase and was seen oscillating in a narrow trading band, around the 1.3230-35 region through the Asian session.

The pair managed to defend the 1.3200 mark and attracted some buying on the first day of a new week, though the attempted recovery lacked any follow-through amid renewed US dollar strength. As investors' looked past Friday's mixed US NFP report, the USD was back in demand and remained well supported by the prospects for a faster policy tightening by the Fed.

Investors seem convinced that the Fed would be forced to adopt a more aggressive policy response to contain stubbornly high inflation. In fact, the money markets indicate a high probability of the Fed liftoff by May 2022, which, in turn, acted as a tailwind for the greenback. This, along with Brexit-related uncertainties, capped the upside for the GBP/USD pair.

Meanwhile, the global risk sentiment stabilized on the back of preliminary observations from South Africa, suggesting that Omicron patients had relatively mild symptoms. This was evident from a generally positive tone around the equity markets, which might hold back the USD bulls from placing fresh bullish bets and limit the downside for the GBP/USD pair.

Hence, it will be prudent to wait for a sustained break below the 1.3200 mark before positioning for a further near-term depreciating move for the GBP/USD pair. The UK economic docket features the only release of Construction PMI, while there isn't any major market-moving data due from the US. This further warrants some caution for aggressive bearish traders.

That said, a scheduled speech by the Bank of England Deputy Governor Ben Broadbent might influence the British pound and provide some impetus to the GBP/USD pair. This, along with the broader market risk sentiment, will be looked upon for some short-term trading opportunities around the major.

Technical levels to watch


Today last price 1.3231
Today Daily Change -0.0008
Today Daily Change % -0.06
Today daily open 1.3239
Daily SMA20 1.3388
Daily SMA50 1.3547
Daily SMA100 1.3668
Daily SMA200 1.3802
Previous Daily High 1.3311
Previous Daily Low 1.3209
Previous Weekly High 1.3371
Previous Weekly Low 1.3194
Previous Monthly High 1.3698
Previous Monthly Low 1.3194
Daily Fibonacci 38.2% 1.3248
Daily Fibonacci 61.8% 1.3272
Daily Pivot Point S1 1.3195
Daily Pivot Point S2 1.3151
Daily Pivot Point S3 1.3093
Daily Pivot Point R1 1.3297
Daily Pivot Point R2 1.3355
Daily Pivot Point R3 1.3399



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