The pair has been in a bullish correction in the daily chart. The down trending trend line is still in play. The sellers may keep their eyes on the pair to go short from the resistance of that trend line.
•GBP/USD is back to trading flat on the day as the bulls move in from the lows of 1.1355, taking on the 1.14 area again. The pair ended Monday around 1.1435, modestly up for the day and still bearish in the daily chart.
•The sentiment surrounding surging inflation and tighter monetary policy continues to run the show, favoring the US dollar more so as the UK economy fares poorly vs. the US economy. The greenback remains close to two-decade highs as per the US dollar index DXY which measures the currency against six counterparts. DXY was up at 110.18 the high on Monday, not far from 20-year high of 110.79 hit on September. 7.
•Risk-off sentiment is also contributing to a higher US dollar in the face of the aggressive tightening path that global banks are on as they try to contain uncomfortably high inflation. A slew of central banks will meet this week and Fed funds futures have priced in a 79% chance of a 75-basis-point rate hike this week and a 21% probability of a 100-basis-point increase at the conclusion of the Fed committee's two-day policy meeting. Meanwhile, the BoE is expected to raise rates by either 50bps and 75bps.
•The GBP/USD offers bearish stance in daily chart, it maintains the downward slope and now is stabilized below all main SMAs, indicating bearish strength. Meanwhile, the 20 SMA continued accelerating south and developing far below longer ones, suggesting bears not exhausted yet. On upside, The immediate resistance is 1.1540 with a break above it exposing to 1.1740.
•Techinical readings in the daily chart support the bearish stances. RSI indicator stabilized around 34, while the Momentum indicator stabilized below the midline, suggesting downward potentials. On downside, the immediate support is 1.1350, unable to defend this level will resume the decline to 1.1300.