Unlike most of the world's major currencies, the Japanese yen, Swiss franc and British pound continue to resist the "American". And if the stability of the first two of them is fully explained by the high demand for safe-haven assets, then the return of GBP/USD quotes to the range of medium-term consolidation of 1.3-1.335 looks strange. However, only at first glance.

The pound did not start well, under pressure due to uncertainty in trade negotiations between London and Brussels and due to the growing likelihood of weakening the monetary policy of the Bank of England. On the eve of the January MPC meeting, the chances of reducing the repo rate reached 70%. However, the Committee voted by 7 votes to 2 in favor of keeping it at the level of 0.75%, which allowed the "bulls" for GBP/USD to recover.

In the future, statistics on Albion were mixed, and investors' attention seemed to be completely switched to the trade negotiations between Britain and the EU, however, the resignation of Chancellor Sajid Javid swung the scales towards sterling. Boris Johnson received a more loyal minister in the person of Rishi Sanak, and investors began to weigh the possibility of increasing public spending to keep the Brexit's burdened economy of Albion afloat. The fiscal stimulus will allow dispersing GDP and consumer prices, which will reduce the chances of easing the BOE's monetary policy and extend a helping hand to the "bulls" on GBP/USD.

Dynamics of the repo rate and British inflation

It is doubtful that the economy of the Foggy Albion could boast the same success as the American one, which was significantly helped by the tax reform of 2017, however, official London is quite capable of creating a certain security cushion. Britain needs it due to difficult negotiations with the EU. Brussels is ready to give the British zero tariffs but requires maintaining control over the judiciary. Albion wants the same conditions as other countries in the world, including Japan and Canada.

Along with trade negotiations, investors will be closely watching the economic calendar. Releases of data on the British labor market, inflation and retail sales can lead the GBP/USD pair in motion. The actual data will affect the chances of monetary expansion, which has now shifted smoothly to 2021. Let's not forget that the pound remains stable even against the background of a strong US dollar using its status as a safe-haven currency, strong data on States and the Fed's reluctance to change the federal funds rate. If something in the "American" mechanism starts to fail, the "bulls" on GBP/USD will certainly take advantage of it.

Technically, a combination of "Three Indians" and "Splash and Regiment" patterns was formed on the daily chart of the analyzed pair. If buyers manage to stay within the trading range of 1.3-1.335 ("shelves") and the ascending trading channel, the chances of restoring the "bullish" trend will increase.

GBP/USD, the daily chart