GBP/USD prints corrective pullback around 1.2150 ahead of key UK statistics, Fed Minutes

• GBP/USD resists extending two-day downtrend despite recent inaction.
• BOE’s Bailey shows readiness for a ‘review’ on UK PM Candidate Truss’ criticism.
• UK employment, retail sales and inflation data to decorate calendar, Fed Minutes will be eyed too.

GBP/USD picks up bids to refresh intraday high near 1.2150 during Monday’s Asians session. In doing so, the cable pair cheers the broad US dollar weakness while paying less heed to the uncertainty surrounding the Bank of England’s (BOE) next move.

The Telegraph came out with the news suggesting that Bank of England (BOE) Governor Andrew Bailey would be “open to a review” of the central bank’s mandate after Foreign Secretary Liz Truss criticized its approach to inflation. The news should have gained major attention as Truss is the front runner in the UK PM race and has signaled, per Bloomberg News, that she would “look again” at the BOE’s mandate “to make sure it is tough enough on inflation.”

On a different page, the US Dollar Index (DXY) renews its daily bottom around 105.60, remains pressured around the monthly low, as traders weigh the recently downbeat US inflation data and the hawkish Fedspeak.

It should be noted that the UK’s softer prints of the Gross Domestic Product (GDP) for the second quarter (Q2) joined better-than-forecast Michigan Consumer Sentiment Index for August to weigh on the GBP/USD prices the previous day.

During the weekend, a probable meeting between US President Joe Biden and his Chinese counterpart Xi Jinping, as signaled by the Wall Street Journal (WSJ), appeared to have favored the risk-on mood. Also positive for the mood were headlines suggesting improved coronavirus conditions in China's financial hub Shanghai. However, the increased count of the US lawmakers who is visiting Taiwan challenges the sentiment.

Amid these plays, the US 10-year Treasury yields remain pressured at around 2.84% after posting weekly losses by the end of Friday. Further, S&P 500 Futures print 0.25% intraday losses while Japan’s Nikkei 225 rises 0.65% on a day by the press time. It’s worth noting that Wall Street rallied on Friday.

Having witnessed a short-covering move, GBP/USD traders may observe Monday’s Empire State Manufacturing PMI for August for fresh impulse. However, major attention will be given to the UK’s top-tier data and the Federal Open Market Committee (FOMC) Minutes.

Technical analysis

GBP/USD bounces off 50-DMA support near 1.2130 but remains on the seller’s radar unless staying below a two-month-old resistance line, around 1.2260 by the press time. Also acting as the key support is an upward sloping support trend line from mid-July, close to 1.2090 at the latest.