GBP/USD Turns Bearish, But Plenty of volatility ahead

In a recent technical comment on the GBP/USD outlook Forex.com say:

"Bias lower below 1.5265 is for further moves towards 1.5220 initially ahead of 1.5180 next, above may see 1.5300 & then 1.5330 200hr short term moving average next."

Geoffrey Yu at UBS says he is neutral until such a time as key levels are broken:

"Following the test of significant resistance at 1.5394, the pair came under pressure. This weakness is trading just above key support at 1.5198, a closing break below this would prolong the correction."

Luc Luyet at MIG Bank says he sees further losses:

"GBP/USD has broken its support at 1.5263, which suggests a weakening technical configuration. Other supports are at 1.5154 (intraday low) and 1.5028. An hourly resistance is at 1.5296. Another resistance stands at 1.5435."

US dollar volatility forecasted to pick up

Richard Driver at CaxtonFX says the dollar is finding some favour ahead of Fed statement tomorrow night:

"This pair’s slide yesterday was largely the result of broad-based sterling-selling but there was some dollar-positivity as well. Obama announced a willingness to cut corporate taxes and simplify the system, which could result in repatriation of USD to invest domestically. This would also result in reduced US corporate investment in Britain.

"Today’s US economic figures should trigger plenty of volatility, particularly amid a wide spread of expectations for the advance GDP number for Q2. Tonight’s Fed statement will have the final say as traders remain obsessed with the probable timing of a QE3 tapering. If the Fed is less dovish, expect a significant USD rally."

ADP Payroll data to provide further volatility for Pound / Dollar pair

Boris Schlossberg at BK Asset Management says we shouldn't forget the ADP data due within a couple of hours:

"Before the FOMC statement at 18:00 GMT, the currency market will get a glimpse of the ADP data and the US Q2 GDP results.

"The market essentially expects to see the same readings from the ADP as the month prior, but if there is significant deviation either way the greenback could react violently. An ADP print of 125K or less would likely cause a further selloff in USD/JPY with the pair possibly testing support at 97.00 as hopes of tapering will fade fast.

"On the other hand if ADP prints closer to 200K USD/JPY could quickly start to move higher towards 98.50 as hopes for a more hawkish Fed statement revive the bulls."