The British pound slightly regains the upside momentum against the US dollar and Euro ahead of the Bank of England meeting. The market participants are expecting the central bank will increase the interest rates for the fifth consecutive time on Thursday. Meanwhile, on Wednesday the US Federal Reserve hiked its policy rate by 75 basis points, making it the biggest interest rate rise in almost 30 years.
GBPUSD key technical levels to watch for today:
Support: 1.2040 and 1.1960
Resistance: 1.2210 and 1.2320
US futures struggling to hold the previous session's gains and European shares opened lower on Thursday after the Federal Reserve and European Central Bank seem poised to aggressively tighten financial conditions.
Crude oil prices fell to the fresh weekly lows on Wednesday driven weaker-than-expected US inventory report and hawkish comments from the Fed’s hawkish hike. The EIA data showed the crude inventories increased by 1.956 million barrels in the week ended June 10th, compared to market expectations for a 1.314 million drop.
In the currency market, the New Zealand dollar reversed from the previous session highs following the release of disappointing New Zealand GDP data. The data showed the GDP in the first quarter of this year contracted by 0.2% from last year’s fourth quarter.
The precious metal rebounded back to above $1830 after the metal failed to break below the key psychological support of $1800. Moving ahead, the gold traders should closely monitor the BOE decision and US housing data.
On the data front, US retail sales in May declined for the first time in five months. The US retail sales dropped by 0.3% in May, dropping from April's revised 0.7% increase.
Moving ahead today, the important events to watch:
UK – BOE interest rate decision and statement: GMT – 11.00
US – Jobless claims: GMT – 12.30
US – Building permits: GMT – 12.30
Worldwide, more than 535 million people have been confirmed infected and more than 6.3 million have died. The United States has confirmed over 85.5 million cases and has had more than 1011,200 deaths from COVID-19, the highest total in the world.
Technical Outlook and Review
EURUSD: For today, the first nearest support level is located at 1.0390. In case it breaks below this level, it will head towards the next support level which is located near 1.0350. On the upside, 1.0510 will act as an immediate and strong hurdle while 1.0550 will be a critical resistance zone because above this, bulls are likely to dominate.
The important levels to watch for today: Support- 1.0390 and 1.0350 Resistance- 1.0510 and 1.0550.
GOLD: For today, 1824 is the immediate support level, followed by 1812. If the metal breaks below 1812, the slump will quickly extend toward the 1800 mark. On the flip side, the first resistance at 1842 any break above this level will open 1850/55 minimum.
The important levels to watch for today: Support- 1824 and 1812 Resistance- 1842 and 1850.
Quote of the day - A trading philosophy is something that cannot just be transferred from one person to another; it’s something that you have to acquire yourself through time and effort - Richard Driehaus.