- Pound reversal from 1.1565 high finds support at 1.1450.
- Better-than-expected US data buoyed the dollar.
- GBP/USD maintains its positive bias as long as it is above 1.1440 – UOB.
Sterling’s reversal from session highs at 1.1565 seen Tuesday morning in the US has found buyers at 1.1450, allowing the pair to return to levels close to 1.1500. On the daily chart, cable remains moderately buying, picking up after Monday’s 0.9% reversal.
Hopes of a hawkish Fed have crushed the pound
The positive market sentiment seen during the Asian and European sessions, which propelled the British pound to the middle of the 1,500-1,500 range, faded during the North American session. A series of upbeat US macroeconomic indicators called into question the theory of a softer Fed tightening in the coming months and sent the dollar soaring.
Manufacturing activity beat expectations in October, with the US S&P and PMI posting better-than-expected results, while JOLTS job openings confirmed tight US labor market conditions. These figures have eased concerns about the possibility of a softer economic scenario that would force the US central bank to adopt a more accommodative stance.
GBP/USD maintains a positive outlook as long as it is above 1.1440 — UOB
FX analysts at UOB see the pair with a short-term bullish bias while above 1.1440: “Earlier last week we turned GBP positive. October cash 1.1630), we signaled that GBP remains strong and noted that the next level to watch is at 1.1760 (…) However, we remain positive on GBP for now and only a break of 1.1440 (no change from last Friday’s “strong support” level) would indicate that the GBP is not going any further.”
Technical levels to watch
Source: Fx Street
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