The pound sterling was actively gaining in value until the publication of the US unemployment claims report. Just after that, the market behavior shocked traders. The pound sterling started losing value despite a faster than expected rise in the number of claims. As a result, the currency lost all its gains. The number of first-time claims increased by 13,000 instead of 6,000. The number of continuing claims surged by 38,000 instead of rising by 10,000. Against the backdrop, the pound's decline seems illogical. However, traders should keep in mind that the US dollar is expected to go on growing amid the Fed's actions and the fact that yesterday's unemployment claims data failed to affect the labor market situation. What is more, the British pound started falling when it touched the level of 1.22. Traders thought that the correction was over and started waiting for the greenback's rise. In other words, the pound's behavior could be explained only by technical factors, whereas the macroeconomic data was ignored.

US Continuing Claims

If the market sentiment shifts in favor of the US dollar, all macroeconomic reports will be considered through the prism of the greenback's appreciation. What is more, the UK economic growth rate is likely to slacken to 0.2% from 1.9%. Once the data is published, the pound sterling will resume falling.

UK GDP Growth Rate

Yesterday, the pound/dollar pair showed high activity and jumped by 120 pips. After that, it slipped by almost the same magnitude. A local rise in the number of long positions boosted the price above 1.2150. However, the pound sterling failed to consolidate at the reached levels.

On the four-hour chart, the RSI technical indicator exceeded the mid line 50 for some time, which pointed to the end of the correctional movement. On the daily chart, the indicator is still hovering in the lower area of 30/50.

On the four-hour chart, the Alligator's MAs have numerous intersections, which reflects a slowdown in the correction phase.

Outlook

Against the backdrop, there is no clear technical signal that the pair will resume falling. However, the situation may change if the price slides below 1.2050. In the event of this, the psychological level of 1.2000 could be hit by sellers. This, in turn, may lead to a breakout. Traders will get a sell signal once the price settles below 1.1950.

According to the alternative scenario, the pair will trade sideways. The level of 1.2000 made sellers stop, thus creating a range of 1.2000/1.2100

In terms of the complex indicator analysis, we see that in the short-term and intraday periods, indicators are signaling sell opportunities.