The unexpected drop in the UK unemployment rate, from 4.9% to 4.8%, boosted the pound's rise, despite the fact that the unemployment rate was projected to rise to 5.0%. Moreover, there have been a lot of questions about the British statistics on the labor market for a long time, and in theory, they should have become a reason for at least suspending the growth of the pound. The publication of data on the labor market should have led to a local correction. However, the general optimism caused by the extremely positive epidemiological dynamics in the United Kingdom led to the fact that everyone decided not to pay attention to the oddities of the British statistics on the labor market, and vice versa. And this only strengthened the growth of the pound.

Unemployment rate (UK):

The inflation data may become the reason for the correction. Moreover, the growth rate of consumer prices in the UK may accelerate from 0.7% to 1.4%. This is about a twofold acceleration of inflation growth rates, which means that the risks of an inflationary spiral are increasing in the United Kingdom. And this gives rise to risks that the Bank of England may take emergency measures to curb inflation, which boil down solely to tightening monetary policy. And British business is certainly not ready for such a turn. In general, inflation can knock down the pound and lead to the very correction that is clearly overdue.

Inflation (UK):

After a series of upward cycles, the GBP/USD currency pair came close to the local maximum of the medium-term trend of 1.4224, where the volume of long positions decreased on a natural basis. Market dynamics have signs of acceleration, but the main motivator, as before, are speculators, who are firmly entrenched in the market.

Based on the current location of the quotes, a stagnant pullback will be seen relative to the 1.4180 / 1.4224 resistance area.

Looking at the trading chart in general terms, the daily period, we can see a full price recovery relative to the correction 1.4224 ---> 1.3668.

In this situation, it is worth paying special attention to the price area 1.4180 / 1.4224, since the logical basis associated with it still takes place in the market. In this regard, the scenario of a price rebound in the direction of 1.4100 cannot be excluded from consideration. An upward development scenario will be applicable in the market if the price is kept above 1.4224 for at least a four-hour period.

From the point of view of a comprehensive indicator analysis, it can be seen that technical instruments continue to signal buy due to price fluctuations at the peak of the medium-term trend.