GBP/USD snaps three-day losing streak above 1.3400, Russia-Ukraine stand-off eyed

• GBP/USD consolidates the biggest daily fall in 16 weeks, eyes first negative weekly closing in four.
• US muster the courage to gather NATO leaders, UK proposed Russia’s exclusion from SWIFT.
• Hopes of ceasefire deal gain momentum even as Russia bombards Kyiv, yields weigh on USD, stock futures remain pressured.
• NATO meeting updates will be crucial, US data and Fedspeak are also important.

GBP/USD floats above 1.3400, up 0.25% intraday near 1.3425 heading into Friday’s London open.

The cable pair dropped the most since early November the previous day as the market rushed to the US dollar in search of risk-safety due to the Russian invasion of Ukraine. That said, the recent corrective pullback takes clues from headlines favoring a cautious optimism over a ceasefire deal between Moscow and Kyiv.

Ukraine President Zelenskiy’s comments that Russian troops stopped from advancing in most directions seemed to have added to the recently upbeat mood. However, Western leaders stay ready to take harsh measures for Moscow’s military action and hence keep the stock futures mildly offered.

That said, US President Joe Biden’s readiness to gather global leaders, virtually, to discuss the security situation in and around Ukraine improved mood in the early Asian session. Before that, comments from Russia, like “Moscow is willing to negotiate the terms of Ukraine's surrender,” add to the market’s cautious optimism. On the same line were chatters that Ukraine President Zelenskyy said they need to discuss ceasefire with Russia.

It should be noted that UK Prime Minister Boris Johnson proposed Russia’s exclusion from the SWIFT system to mark as the fiercest sanction. However, Ukraine President Zelenskiy recently mentioned that sanctions imposed on Russia are not enough.

Elsewhere, The Guardian conveyed Brexit-negative news while saying, “The European court of justice has been advised that British nationals living on the continent do not keep the advantages of EU citizenship now the UK has left the bloc.”

On the other hand, the second reading of the US Q4 GDP matched 7.0% annualized forecasts but firmer figures of Personal Consumption Expenditure, Chicago Fed National Activity Index and Jobless Claims seemed to have added strength to the US dollar on Thursday. Fedspeak could also be considered favoring the DXY as Atlanta Fed Raphael Bostic and Richmond Fed President Thomas Barkin join Federal Reserve (Fed) Governor Christopher Waller to favor faster rate-hikes.

Moving on, the US-NATO meeting will be crucial for the markets while Fedspeak and the Fed’s key inflation gauge, namely Core PCE Price Index, as well as Durable Goods Orders, for January will offer extra directives to the GBP/USD.

Technical analysis

Despite the corrective pullback, GBP/USD remains below a convergence of the 100-DMA and an upward sloping previous support line, near 1.3500, which in turn keeps the cable sellers hopeful.