GBP/USD rejected near 1.2950, back to test 1.2900?

Having reached fresh 3-day tops just ahead of the mid-point of 1.29 handle, the GBP/USD pair ran through fresh offers and now heads back below the key resistance-turned support located at 1.2930 levels.  

GBP/USD: US PPI, Yellen in focus

The bid tone around the pound weakened sharply, after the comments from the UK PM May hit the wires, citing that she was devastated by results of snap election. Her comments reminded markets of the election debacle and lingering UK political uncertainty, especially in light of the Brexit deal.

Moreover, renewed buying interest seen building around the US dollar against its main competitors, as investors gear up for the Round 2 of Yellen today. A minor-recovery in risk sentiment appears to lend support to Treasury yields across the curve, in turn offering some respite to the USD bulls.

Looking ahead, it remains to be seen if the spot can manage to keep the 1.29 handle, as hawkish comments from the BOE MPC member McCafferty continue to underpin the sentiment around the GBP.

GBP/USD levels to consider             

Jim Langlands at FX Charts noted, “The short term momentum indicators are now neutral, as are the dailies, so there are better things to watch but on the downside, back below minor support near 1.2850 could retest the stronger 1.2810 area. A break of 1.2790 could have us quickly back at 1.2750 although this seems unlikely today. On the topside, sellers will be seen at 1.2900/05 ahead of the 1.2926 11 July high, at 1.2935 and then again at 1.2985/1.3000 ahead of the trend high of 1.3047.”