GBP/USD: Brexit woes, US Dollar rebound on full markets favor bears ahead of UK/US PMI

• GBP/USD clings to mild losses as markets await key data.
• US Treasury bond yields recover on full markets’ return, geopolitical fears.
• UK PM Sunak struggles to achieve Brexit deal amid major backlash from Eurosceptic Conservative MPs.
• Preliminary S&P Global PMIs for February appear the key ahead of Wednesday‘s Fed Minutes.

GBP/USD lacks follow-through as it prints mild losses around 1.2020 heading into Tuesday’s London open, flirting with an intraday low by the press time.

In doing so, the Cable pair takes clues from the technical candlestick formation, as well as fundamentals surrounding Brexit and the market sentiment.

Monday’s bearish Doji teases the GBP/USD sellers amid fears of no imminent Brexit deal as the UK’s Conservative Members of the Parliament (MPs) dislike the deal with the European Union (EU) on Northern Ireland (NI). Some of them are threatening to resign, per The Times, amid fears of the compromised deal.

The news also mentioned that UK Prime Minister Rishi Sunak spent notable time in the House of Commons to convince the MPs that no deal had yet been agreed and talks were continuing. “He was told he ‘hasn’t got a hope’ of succeeding without the support of the Democratic Unionist Party,” per The Times.

Elsewhere, a pick-up in the US Treasury bond yields joins the geopolitical fears surrounding North Korea, China and Russia to weigh on the market sentiment and underpin the US Dollar’s rebound as the US traders return after a long weekend. Also adding strength to the greenback, which in turn weighs on the GBP/USD price, could be the market’s concerns that the Federal Reserve (Fed) will be more hawkish than the Bank of England (BoE).

To confirm the same, Wednesday’s Federal Open Market Committee (FOMC) Monetary Policy Meeting Minutes will be eyed closely. Ahead of that, the preliminary readings of the UK and the US Purchasing Managers Index (PMI) data for February should offer intermediate clues. It’s worth noting that the British numbers have mostly been disappointing of late and hence downbeat UK PMIs are likely to weigh on the Cable pair, especially amid Brexit woes and geopolitical fears. On the other hand, the US figures have been positive in recent days and hence odds of the GBP/USD pair’s further weakness on upbeat data can’t be ruled out.

Technical analysis

Monday’s Doji candlestick on the daily GBP/USD chart suggests another fall of the Cable pair towards the 100-day Exponential Moving Average (EMA), around 1.1915 by the press time.