GBP/USD, supported above 1.1450 after rejection at 1.1565

• Pound's reversal from the 1.1565 high finds support at 1.1450.
• Better than expected US data has boosted the USD.
• GBP/USD maintains its positive bias while above 1.1440 – UOB.

Sterling’s reversal from session highs at 1.1565 witnessed on Tuesday’s morning US session has found buyers at 1.1450, allowing the pair to return to levels near 1.1500. On the daily chart, the cable remains moderately bid, picking up after a 0.9% reversal on Monday.

Hopes of a hawkish Fed have crushed the pound

The positive market sentiment witnessed during the Asian and European sessions, which pushed the GBP to the mid-1. 1500 range, vanished during the North American session. A series of upbeat US macroeconomic indicators challenged the theory of a softer Fed tightening in the months ahead and sent the US dollar surging.

Manufacturing activity beat expectations in October, with the US S&P and the ISM PMI’s posting better than expected results, while the JOLTS job openings confirmed the 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 while above 1.1440 – UOB

FX analysts at UOB see the pair biased higher in the near term, while above 1.1440: “We turned positive on GBP early last week. In our latest narrative from last Thursday (27 Oct, spot at 1.1630), we indicated that GBP is still strong and we noted that the next level to monitor is at 1.1760 (…) However, we continue to hold a positive GBP view for now and only a break of 1.1440 (no change in ‘strong support’ level from last Friday) would indicate that GBP is not advancing further."

Technical levels to watch