• GBP/USD regained strong positive traction on Tuesday amid a broad-based USD weakness.
  • The recent hawkish BoE signals underpinned the British pound and remained supportive.
  • A sustained move beyond 100-day SMA will set the stage for a further appreciating move.

The USD remained heavily offered through the first half of the European session and pushed the GBP/USD pair to one-month tops, closer to the 1.3800 mark in the last hour.

Following the previous day's modest downtick, the GBP/USD pair caught some fresh bids on Tuesday and built on its recent strong rebound from the vicinity of the 1.3400 mark touched in late September. This marked the fourth day of a positive move in the previous five and was sponsored by aggressive selling around the US dollar.

The greenback was weighed down by the overnight pullback in the US Treasury bond yields and dismal US Industrial Production data, which fell by the most in seven months. Apart from this, the dominant risk-on flow dragged the safe-haven USD to three-week lows and was seen as a key factor that provided a strong lift to the GBP/USD pair.

Meanwhile, the ongoing USD corrective decline suggests that the markets have fully priced in the prospects for an early policy tightening by the Fed. It is worth recalling that the FOMC meeting released last Wednesday reaffirmed that the Fed remains on track to begin rolling back its massive pandemic-era stimulus by the end of 2021.

On the other hand, the British pound was underpinned by the recent hawkish remarks from the Bank of England officials, signalling that an imminent interest rate hike later this year. In fact, the BoE Governor Andrew Bailey said that the British central bank will have to act amid increasing risks to medium-term inflation expectations.

With the latest leg up, the GBP/USD pair has now moved back closer to 100-day SMA pivotal resistance, currently around the 1.3805 region. A sustained move beyond will be seen as a fresh trigger for bullish traders and set the stage for additional gains amid absent relevant market-moving economic releases, either from the UK or the US.

That said, traders might take cues from scheduled speeches from the BoE Governor Andrew Bailey and BoE chief economist Catherine Mann for some impetus. Apart from this, comments by Fed Governor Michelle Bowman could influence the USD price dynamics and produce some short-term trading opportunities around the GBP/USD pair.

Technical levels to watch

GBP/USD

Overview
Today last price 1.3794
Today Daily Change 0.0067
Today Daily Change % 0.49
Today daily open 1.3727
 
Trends
Daily SMA20 1.3621
Daily SMA50 1.3716
Daily SMA100 1.3815
Daily SMA200 1.3847
 
Levels
Previous Daily High 1.3766
Previous Daily Low 1.3709
Previous Weekly High 1.3773
Previous Weekly Low 1.3568
Previous Monthly High 1.3913
Previous Monthly Low 1.3412
Daily Fibonacci 38.2% 1.3731
Daily Fibonacci 61.8% 1.3744
Daily Pivot Point S1 1.3702
Daily Pivot Point S2 1.3678
Daily Pivot Point S3 1.3646
Daily Pivot Point R1 1.3759
Daily Pivot Point R2 1.379
Daily Pivot Point R3 1.3815

 

 

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