GBP/USD: a round trip over London and US session, eyes back on 1.29 handle

Currently, GBP/USD is trading at 1.2886, up 0.29% on the day, having posted a daily high at 1.2909 and low at 1.2812.

Fed's Yellen speech: Not all groups in labor market faring equally well

GBP/USD has been two-way business on the around turn between the highs and lows. In the London session, all eyes were on the UK employment data. The unemployment rate was at 4.5% for May and the lowest rate since 1975 while the employment rate was at 74.9% and a record high. Prior to that event, with sterling down at 1.2812, this was a 2 week low after a dovish hint from BoE's Broadbent who said that the BoE are not ready to hike rates with comments sighted in the press. Profit-taking on Sterling shorts helped inflate cable to 1.2865 after the UK data.

Fed's Yellen speech: Given current taxing and spending decisions, debt is unsustainable

In the US session, all eyes have been with Fed's chairwoman Yellen. Investors have been disappointed so far by the limited information provided in the transcripts of the Fed's June meeting of the Fed’s Open Market Committee, but today, there is still a lack of clarity although it seems quite clear that there is still some concern in regards to inflationary pressures, or there lack of, and the Fed is on hold until they are satisfied that inflation is on target. In respect to the balance sheet, again, a lack of clarity but the Fed's aims are at avoiding a market disruption.

GBP/USD levels

GBP/USD has seen another failure at the 1.3000/60 recent highs where the levels should continue to act as formidable resistance, according to analysts at Commerzbank. "It is on the defensive and has eased back to below the 20 day ma at 1.2835. The intraday Elliott wave counts continue to suggest that we should stabilise in this vicinity ahead of a re-attempt on 1.3060 and we will wait and sell the rally...The market should now find decent support circa 1.2775/50. Below 1.2750 there is scope for an extension to its 200 day ma and uptrend at 1.2547/83."

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