GBP/USD: US dollar weakness, Brexit chatters favor bulls around 1.3600

• GBP/USD stays mildly positive while picking up bids above 1.3600.
• Brexit deal reaches the House of Commons for revoting, UK-China tussle intensify.
• UK NHS Chairwoman fears the pandemic will throw unpredicted problems.
• The incoming US Treasury Secretary Janet Yellen’s speech, Brexit chatters and virus updates will be the key amid light calendar.

GBP/USD extends the previous day’s recovery moves above 1.3600, currently up 0.15% intraday around 1.3605, while heading into the London open on Tuesday. Concerns relating to the UK’s ability to convince the European Union (EU) over losses in fisheries as well as vaccinations hopes join the US dollar weakness to favor the bulls. Global markets are upbeat amid calls that upcoming US official Yellen will be able to get the Biden government’s fiscal stimulus through the parliament. Though, cautious sentiment ahead of the key events and the fears of the coronavirus (COVID-19) probes the buyers.

Although UK PM Boris Johnson pledged £23million to aid the fishing exporters who are affected by Brexit, per the BBC, Daily Express mentions, “British exporters are predicted to face €28 billion in losses this year alone.” Further, Bloomberg came out with the news suggesting “The rejection rate for cross-Channel cargo rose again last week to 168% of the third-quarter average. It had peaked for 2020 near the end of the year -- when France shut its borders to UK haulers for 48 hours to contain a new coronavirus strain -- before falling over the holiday period.”

Not only cargos but the service providers are also criticizing the Brexit deal. The same could have London Mayor Sadiq Khan to claim the agreement signed on Christmas Eve was effectively a no-deal Brexit for the lucrative sector which is largely based in the capital.

As a result, Britain is under immense pressure to alter the terms of the Brexit deal and hence today’s voting in the House of Commons could offer some promising moves. However, talks surrounding China have committed human rights abuses against its Uighur Muslim population, and its linkages to Brexit can spoil the mood while an independent panel, cited by The Guardian, has already criticized Beijing and the World Health Organization (WHO) for their role in covid restrictions.

On a different page, Diana Mary " Dido " Harding, chairwoman of the UK National Health Services (NHS) Improvement said, per Daily Mail, that the UK coronavirus testing system is in one of the 'leading positions worldwide' to track new Covid variants – and admits she fears the pandemic will still 'certainly' throw up unpredicted problems in the future.

In the case of the US, prepared remarks for today’s speech in the Senate suggest the incoming US Treasury Secretary, ex-Fed Chair, backs President-elect Joe Biden’s $1.9 trillion stimulus. While the same should have helped the risk-on mood and weighed on the US dollar index, indecision over the lifting of the American travel guide on Europe and Brazil probe the optimists.

Looking forward, the return of the US traders can please the GBP/USD buyers amid hopes of further stimulus and Brexit optimism. Though, covid woes and unexpected disappointment from Yellen can test the buyers.

Technical analysis

GBP/USD justifies its bounce off 21-day SMA and a bullish pin bar candlestick pattern on the daily (1D) chart. Though, the 1.3600 and the 1.3700 round-figure precede an ascending trend line from January 04, at 1.3715 now, to challenge the bulls. Alternatively, a daily closing below 21-day SMA of 1.3573 will recall GBP/USD sellers targeting an ascending trend line from December 22, currently around 1.3515.