GBP/USD pares the biggest weekly loss in six as it refreshes intraday high near 1.2200 during early Monday.

The Cable pair’s latest run-up could be linked to the broad-based US Dollar pullback, despite the hawkish Fedspeak. In doing so, the British Pound also pays a little heed to the headlines suggesting more pain for the UK’s economy, as well as political jitters surrounding the workers’ pay and the resulting walkouts.

That said, The Guardian came out with the news during the weekend that the UK health secretary, Steve Barclay, is expected to contact health unions to urge fresh talks aimed at averting further strikes, amid new warnings that more action could put patients in danger. However, Reuters recently mentioned, “The British government is "resolute" it will not budge on nurses' pay, senior minister Oliver Dowden said on Sunday, ahead of a planned second nationwide walkout by the profession over an average pay offer of 4% while inflation runs at more than 10%.”

It should be noted that an estimated 10,000 nurses in the state-funded National Health Service in England, Wales and Northern Ireland plan to walk out again on Tuesday after staging strikes on Thursday in protest over the pay increase they have been offered.

Furthermore, KPMG’s analysis, shared by The Times, suggests that the UK has already entered a “shallow and protracted recession” that will hit living standards and last until the end of next year, which could have weighed on the GBP/USD prices. “KPMG estimates that the economy entered a recession in the third quarter of this year and will contract by 1.3 percent next year owing to a sharp drop in consumer spending amid rising interest rates,” the news adds.

Elsewhere, hawkish comments from the Presidents of the Federal Reserve Bank of Cleveland and New York tried to challenge the GBP/USD buyers but could not. The reason could be linked to the downbeat prints of the US PMIs for December, published the previous day.

Additionally probing the Cable pair buyers is China’s lowest business confidence in 10 years and the Bank of England’s (BOE) hidden signals that the “Old Lady”, as it is informally known, is up for slower rate hikes and monetary policy normalization.

Given the market’s consolidation of the recent moves, despite multiple negatives, the GBP/USD prices may witness further downside should the scheduled prints of the Q3 UK GDP offer a negative surprise. Also, a firmer print of Friday’s US Core Personal Consumption Expenditures (PCE) - Price Index, expected 4.6% YoY and 5.0% previous readings, may as well favor the pair sellers as the same is the Fed’s preferred inflation gauge.

Technical analysis

GBP/USD bounces off a five-week-old ascending support line, around 1.2150 by the press time, but the recovery moves remain elusive unless crossing the 1.2350 hurdle comprising the top early December’s high and the last Wednesday’s swing low.

ADDITIONAL IMPORTANT LEVELS

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