• GBP/USD picks up bids to refresh intraday high, bouncing off weekly low to snap three-day downtrend.
• Former British PM Boris Johnson’s attack on Brexit deal, unimpressive comments from BoE’s Pill probe Cable buyers.
• Fed’s Bostic hints at policy pivot in late summer and weigh on US Treasury bond yields, US Dollar.
• UK S&P Global/CIPS Services PMI, US ISM Services PMI will be crucial for immediate directions.

GBP/USD recovers from the weekly low as it renews its intraday high near 1.1970 while printing the first daily gains in four during early Friday. In doing so, the Cable pair pays little heed to the Brexit-negative headlines, as well as mixed comments from the Bank of England (BoE) officials as the Federal Reserve (Fed) speakers struggle to defend the hawkish bias.

Federal Reserve Bank of Atlanta President Raphael Bostic said on Thursday that the central bank could be in position to pause the current tightening cycle by mid to late summer. On the other hand, Boston Fed President Susan Collins mentioned, per Reuters, that more rate hikes are required to bring inflation back in control. She added that the extent of interest rate hikes will be determined by incoming data.

On the other hand, Chief Economist Huw Pill said on Thursday, per Reuters, that survey indicators that have become available since the publication of the forecast have surprised to the upside, suggesting that the current momentum in economic activity may be slightly stronger than anticipated. On the same line, the latest survey conducted by the Bank of England (BoE) decision maker panel (DMP) showed on Thursday that “businesses’ expectations for their own-price inflation declined in February,” per Reuters.

Elsewhere, ex-UK PM Boris Johnson attacks the incumbent Rishi Sunak’s Brexit deal while saying, “The prime minister had allowed the bloc to retain too much influence in the United Kingdom.” UK’s Johnson also added, “We must be clear about what is really going on here. This is not about the UK taking back control. This is the EU graciously unbending to allow us to do what we want in our own country. Not by our laws, but by theirs." Previously, Ireland’s Democratic Unionist Party (DUP) raised doubts about backing the latest accord over the Northern Ireland Protocol (NIP) in the British Parliament voting.

Amid these plays, Wall Street closed on the positive side, after a downbeat start, whereas the S&P 500 Futures printed mild losses by the press time. Further, US 10-year Treasury bond yields rose to a fresh high since early November 2022 while piercing the 4.0% threshold whereas the two-year counterpart rallied to the highest levels since 2007 to 4.94%. However, the bond coupons have retreated from their multi-month high of late.

It’s worth noting that, the US-China tension at the Group of 20 Nations (G20) meeting, amid the former’s push for sanctions on countries having strong ties with Russia and aiding Moscow in war with Ukraine, previously probed the sentiment. However, the dovish Fed comments and chatters of the Sino-American trade talks seemed to have pushed back the risk-off mood afterward.

Looking ahead, final readings of the UK S&P Global/CIPS Services PMI for February, expected to confirm 53.3 initial forecast, will precede comments from the second-tier BoE and Fed officials to entertain GBP/USD traders. However, major attention will be given to the US ISM Services PMI for February, expected at 54.5 versus 55.2 marked in January.

Also read: ISM Services PMI Preview: Strong figure set to catapult US Dollar to new highs

Technical analysis

A clear upside break of the weekly resistance line, near 1.1990 at the latest, becomes necessary for the GBP/USD bulls to retake control. The Cable pair bears, however, remain off the table unless breaking a two-week-old ascending support line, close to 1.1930 by the press time.