The Pound is the best performer Monday, as investors assess UK Chancellor Hunt's fiscal statement. Hunt reversed almost all tax measures announced on Sept 23. As the US dollar stays on the back foot, GBP/USD at fresh 2-week highs.

From a technical perspective, the GBP/USD pair last week found a decent support near the 50% Fibonacci retracement level of the recent recovery from an all-time low. That said, failures to find acceptance above the 1.1300 mark warrant some caution for bullish traders. The said handle coincides with the 200-period SMA on the 4-hour chart, which if cleared decisively should pave the way for some meaningful upside.

The GBP/USD pair might then accelerate the positive move towards the 1.1380 resistance zone. This is closely followed by the 1.1400 round-figure mark, above which spot prices could climb further towards retesting the monthly peak, just ahead of the 1.1500 psychological mark. Sustained strength beyond the latter will suggest that the pair has formed a near-term bottom and pave the way for a further near-term appreciating move.

On the flip side, the 1.1215-1.1210 region, or the 23.6% Fibo. level, might now protect the immediate downside ahead of the 1.1200 round figure and Friday's swing low, around mid-1.1100s. The next relevant support is pegged near the 1.1100 mark and the 38.2% Fibo. level, around the 1.1055-1.1050 region. Failure to defend the said support levels will negate any near-term positive outlook and shift the bias back in favour of bearish traders.

A modest pullback in the US Treasury bond yields, along with the risk-on impulse, exert some downward pressure on the safe-haven greenback. The pair, however, struggles to find acceptance above the 1.1300 mark as traders prefer to wait for a fresh update on the new UK government's fiscal plans.

GBPUSD Provides a touch down near 1.1400

Oct 17 2022