The pound, as they say, is "unlucky". The Bank of England maintains a dovish position, despite a record increase in inflation, and the government maintains quarantine despite a record (relative to most other countries of the world) number of vaccinated citizens. Plus, there are contradictory macroeconomic reports that do not allow GBP/USD bulls to settle within the 39th figure.

The current week began with a loud political scandal, which is quite piquant in nature. So, the British edition of the Sun published a photo where the Minister of Health Matt Hancock was caught kissing an employee of the Ministry's staff Gina Coladangelo. And it's not that they are in a boss-subordinate relationship, and not that both are married – the main problem of the situation was that this happened to the Minister of Health during the pandemic. Formally, Coladangelo is considered a "person from another household" (that is, not a relative or a spouse), and such contacts are prohibited in the country, according to coronavirus restrictions. As a result of the scandal that broke out, Matt Hancock resigned – at the moment when the country was overwhelmed by a new COVID wave associated with the spread of the Indian strain (the official name is "Delta strain").

In addition, last week, rumors began to be actively exaggerated in the British media that the next round of easing quarantine restrictions will take place on July 5. Let me remind you that due to the spread of the delta strain, the authorities decided to postpone the easing of the quarantine from June 21 to July 19. But given the active pace of vaccination, information appeared in the press that London would allegedly allow an early transition to the next stage of weakening - already in early July.

The British currency showed increased volatility against the background of such a change of circumstances. The political scandal that led to the resignation of one of the key Cabinet ministers put significant pressure on the pound: it fell to 1.3870 against the dollar. However, rumors about the early end of the quarantine allowed the pound to "rehabilitate" - the GBP/USD pair rose to the middle of the 39th figure.

But the first speech of the newly appointed Health Minister Sajid Javid disappointed traders. He denied the rumors: according to the head of the Ministry of Health, quarantine restrictions in the UK will not be relaxed until July 19. And although he assured members of the House of Commons that the government does not intend to extend the current quarantine again, his rhetoric has caused concern among investors, especially in light of the latest coronavirus reports.

So, according to the latest data, a rapid increase in the daily rate of COVID-19 cases was recorded in Britain – more than 20,000 new infected people were diagnosed in the country on June 28. For comparison, it should be noted that in early June, the daily increase was at the level of 3-5,000, in mid-June – at the level of 7-10,000, last Monday - at the level of 12,000. In other words, the upward dynamics is clearly visible. The last time the number of cases of coronavirus detected per day exceeded the 20,000 mark was back in January of this year.

Given such trends, some experts have suggested that despite the assurances of the new head of the Ministry of Health, the UK government will be forced to extend the quarantine after July 19 (or London will remove far from all restrictions). This fact exerts background pressure on the British currency, especially against the background of the dovish position of the Bank of England.

Let me remind you that the central bank took a cautious wait-and-see position at the June meeting, thereby putting pressure on the pair. BoE Chief Economist Andy Haldane was the only one who voted for the termination of purchases of gilts under the quantitative easing program. At the same time, Haldane will leave his post on July 1. The rest of his colleagues took either a restrained or dovish position. In their opinion, the increase in inflation is temporary, while the central bank intends to raise interest rates only when inflation stabilizes near the target 2%, and the situation on the labor market "noticeably improves".

In such conditions, the pair's growth is possible only due to the weakening of the greenback, since the pound does not yet have fundamental arguments for organizing a large-scale offensive. The US currency, in turn, is in standby mode: key data on the growth of the US labor market will be published this Friday. It is likely that Non-farms will determine the vector of further movement of the dollar, especially if they turn out to be weaker than the forecast values.

Thus, the GBP/USD pair in the medium term (at least until next Friday) will continue to trade in the price range of 1.3830-1.3950 (the lower line of the Bollinger Bands on the daily chart is the lower border of the Kumo cloud on the same timeframe). When approaching the lower limit of the range, it is advisable to consider long positions, while an upward momentum to the middle of the 39th figure can be used as an excuse to open short positions.