Last week, sentiment was poor as markets monitored various risk factors and the rout in Cryptocurrencies. During the current one, we see improved mood as market seem to shake-off recent fears, despite the fact that it started with poor economic data from China.
Earlier in the day, the UK reported mostly upbeat labor data, as the Unemployment Rate fell to 3.7% in the March quarter, 0.2 percentage points below pre-coronavirus pandemic levels. 
These figures come in the aftermath of the doom and gloom from the Bank of England earlier in the month, having projected inflation surging to 10% and the economy contracting in the last quarter of the year. 
Markets now await Fed Chair Powell, who is on tap later today and key economic releases from the US. They will also keep an eye on EU-UK relations, as the British government seeks to ignore parts of the Northern Ireland Protocol, which was agreed by the two sides, as part of their Brexit deal.
PM Johnson pointed towards unilateral action in his Belfast Telegraph article on Sunday, writing that "I hope the EU's position changes. If it does not, there will be a necessity to act". 
GBP/USD stages a relief rally of around 1% at the time of writing today, following last week's two year lows (1.2154). This brings this month's high and the EMA200 in its crosshairs (1.2639-70), but will likely need fresh impetus for daily closes above this level. Succesful effort pause downward bias and could open the door for a larger recovery towards and beyond 1.2829.
At this stage however, we are cautious around its ascending prospects and as long as it does not surpass the EMA200, medium-term risk is tilted to the downside, while the Relative Strength Index (RSI) points to overbought levels. As such, we can see a return below 1.2300 that would expose it once again to 1.2079-69, but it may be early for a test of this level.
Senior Market Specialist
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.
Retrieved 17 May 2022 https://www.bankofengland.co.uk/monetary-policy-report/2022/may-2022