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  • GBP/USD holds the previous day’s recovery moves despite repeated failures to cross 1.3700 off-late.
  • Brexit woes, UK-China tussle probe bulls cheering the previous day’s hawkish halt by the BOE.
  • Claims over vaccine-led deaths in the UK, suspension of post-mortems gain rejection.
  • BOE Governor, Deputy and Chief Economist are up for speaking, US employment data will be more important.

GBP/USD fades early day pullback while bouncing off 1.3668, currently around 1.3675, ahead of Friday’s London open. The cable marked a notable reversal from a three-week lo the previous day as the Bank of England (BOE) pushed back the negative rate chatters. Even so, the pair stays sluggish during the quiet session in Asia as traders await the US employment report for January and speeches from the BOE’s key trio.

While matching the market consensus of no rate change and an intact Quantitative Easing (QE), the UK’s central bank signaled that the negative rate option is still far. However, Governor Andrew Bailey said that the Monetary Policy Committee (MPC) members have a “range of views” on negative rates and hence GBP/USD traders await more clarity on the same during today’s speech from the key BOE policymakers.

Elsewhere, the tussle over the Northern Ireland (NI) border intensifies as the UK shows readiness to take harsh measures if the bloc doesn’t respect the British request to extend post-Brexit leeway until 2023. It should be noted the talks over huge losses to British lorries and fisheries have also portrayed Brexit woes.

Amid the coronavirus (COVID-19) vaccinations in the UK, rumors crossed wires that the COVID-19 vaccines could be deadly to the majority of over-65s and post-mortems have been called off “indefinitely”. However, Reuters’ fact-check turndown the chatters before they disappoint the British wave of jabs.

On a different page, the UK and China are again at loggerheads after London revoked the TV license of Chinese state media outlet CGTN. Following the move, Reuters came out with the story saying that China’s foreign ministry issued a statement accusing the British Broadcasting Corp (BBC) of pushing “fake news” in its COVID-19 reporting, demanding an apology and saying that the broadcaster had politicized the pandemic and “rehashed theories about covering up by China”.

Amid these plays, the US stimulus hopes are gaining momentum but the pre-NFP trading lull stops the bulls. That said, stock futures in the US and the UK stay mildly bullish by press time while the US 10-year Treasury yields seesaw around 1.14%.

Moving on, BOE Governor Bailey, Deputy Governor David Ramsden and Chief Economist Andy Haldane are all up for speaking at the Monetary Policy Report National Agency Briefing around 13:30 GMT. Although the event clashes with the US employment report for January, it certainly will be important for the GBP/USD traders if managed to keep the previous day’s hawkish mood.

Technical analysis

GBP/USD bulls need a clear breakout of the stated SMA resistance, at 1.3685 now, to challenging the multi-month top marked during 2021 near 1.3760. In absence of which, an ascending trend line from December 28, currently around 1.3600, becomes the key support.