GBP/USD volatile while Bernanke speaks

Bernanke is speaking on ‘The Economic Outlook’. Close attention is being paid to his testimony to the Joint Economic Committee of Congress. The market had been latching onto strong language in tapering of the QE programme after a series of improved economic data in the US, although in his testimony, the market is now listening to a longer term play on stimulus in a struggling labour market. The road map for exiting the programme is still a long one and that language of tapering came too soon.

The pound has been trading 100 pips lower from the European open, and there are significant concerns for the UK economy, with dovish tones from BoE minutes that came out this morning. It made a low on the session through support and 1.5075. Since his speech, the pair have recovered back to 1.5155 at time of writing with more volatility sure to come through his questions and in the FOMC in four hours time.

Daily technical indicators are reading bearish signals. Key support comes in at 1.4995 and resistance 1.5285