GBP/USD finds some support near 1.1000 mark, upside potential remains limited

• GBP/USD bounces off the 1.1000 mark, over a one-week low touched earlier this Tuesday.
• The USD trims a part of its intraday gains and turns out to be a key factor lending support.
• The fundamental backdrop still favours bears and supports prospects for additional losses.

The GBP/USD pair recovers a few pips from over a one-week low touched during the early European session on Tuesday, though lacks any follow-through buying. The pair remains on the defensive for the fifth successive day and is currently trading just below the 1.1050 area.

The US dollar trims a part of its intraday gains and turns out to be a key factor lending some support to the GBP/USD pair. That said, any meaningful recovery remains elusive amid growing worries about the UK government's fiscal plans and looming recession risks. Furthermore, a combination of factors should act as a tailwind for the greenback and further contribute to capping the upside for the major.

The markets seem convinced that the Federal Reserve will stick to its aggressive policy tightening path to tame inflation and have been pricing in another supersized 75 bps increase in November. The bets were further lifted by the overnight hawkish remarks by Fed Vice Chair Lael Brainard, which remains supportive of elevated US Treasury bond yields and continues to offer support to the greenback.

Apart from this, the prevalent risk-off environment should also benefit the safe-haven buck. The British pound, on the other hand, fails to draw any support from mostly upbeat UK monthly employment details. Even the Bank of England's fresh emergency move to buy more government bonds and calm markets failed to impress bullish traders or provide any impetus to the GBP/USD pair.

This, in turn, supports prospects for an extension of the recent pullback from the vicinity of the 1.1500 psychological mark. There isn't any major market-moving economic data due for release from the US on Tuesday. That said, speeches by influential FOMC members might influence the USD price dynamics and allow traders to grab short-term opportunities around the GBP/USD pair.

Technical levels to watch