Today all eyes are on the Bank of England monetary policy decision which is set to be announced at 11:00 GMT. The market participants anticipate an aggressive interest rate hike in the BOE’s response to tame inflation. British inflation jumped to a four-decade high of 9.4 percent in June. The Bank of England expected to raise interest rates by 0.50% at its meeting today, its largest increase for more than 25 years. The British pound struggling to find the upside momentum against the US dollar and Euro ahead of the Bank of England meeting.
Wall Street closed higher on Wednesday after the recent data showed the U.S. services industry unexpectedly picked up in July as new orders grew solidly. The bullish sentiment is also supported by better-than-expected corporate earnings results. Shares of the vaccine maker Moderna (NASDAQ: MRNA) bounced more than 15% on Wednesday after the company released robust Q2 earnings results.
Crude oil futures extend the decline and strong bearish momentum continues on Thursday Morning after OPEC and its allies decided Wednesday to boost production in September. OPEC+ agreed to increase oil production by only 100,000 barrels per day, which corresponds to about 0.1 percent of global oil demand.
In the currency market, the dollar index, which tracks the U.S. currency against six major peers holds steady as the focus shifts to tomorrow’s US employment report. The British pound tinkered around just below the 1.2180 handles. The Euro slightly recovered against the US dollar following the release of better-than-expected German factory order data.
The safe haven metal has been relatively volatile in the past few days. The metal holding the weekly gains and trades steady above $1770 on Thursday Morning as the metal ignored stronger-than-expected activity in the U.S. services sector.
On the data front, ISM Services PMI data showed a surprise increase in services for July. The ISM Services PMI rose to 56.7 in July, recording the highest level in three months, compared to June’s reading of 55.3.
Moving ahead today, the important events to watch:
UK – BOE interest rate decision and statement: GMT – 11.00
US – Jobless claims: GMT – 12.30
Worldwide, more than 577 million people have been confirmed infected and more than 6.4 million have died. The United States has confirmed over 91 million cases and has had more than 1.02 million 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 1.0130/20. In case if it breaks below this level, it will head towards the next support level which is located near 1.0100 then 1.0080. On the flip side, the immediate resistance at 1.0200 then 1.0230.
The important levels to watch for today: Support- 1.0120 and 1.0080 Resistance- 1.0200 and 1.0230.
GOLD: For today the first support for the Gold appears to be around $1765, in the short-term any break below $1765 the next downside level is to watch $1760/55. On the upper side, the immediate resistance around $1776 any break and close above this level will open at $1782 and then $1788.
The important levels to watch for today: Support- 1765 and 1750 Resistance- 1778 and 1790.
Quote of the day - “The core problem, however, is the need to fit markets into a style of trading rather than finding ways to trade that fit with market behaviour.” – Brett Steenbarger.