Big day for the British pound

4 August, 2016

The Bank of England’s monetary policy meeting today will be the big event as the markets brace for a rate cut. What will determine the price action in GBPUSD will be how much the BoE can loosen monetary policy, which if disappoints could see a strong short squeeze that could shake out the weak short positions at the current levels. Watch for GBPUSD’s breakout above $1.34, while $1.28 remains the lower end of the range.

EURUSD Daily Analysis

EURUSD (1.1143): EURUSD closed bearish following the retest to 1.120 and gave up Tuesday's gains completely. Interestingly, following the upside breakout from the inside bar previously noted, the Tuesday/Wednesday price action in EURUSD has perhaps caught a lot of weak long positions on the wrong side of the market. A close below 1.11492 is essential to confirm the move to the downside, where support at 1.110 - 1.1076 is likely to be targeted. Looking at the Stochastics on the 4-hour time frame, the lower low in Stochs compared to the higher low in price is likely to see some near term bounce to the upside on a dip to 1.110 - 1.076.

USDJPY Daily Analysis

USDJPY (101.23): USDJPY broke down below the 102 support, but the declines have been limited so far. The daily chart shows a potential for price to recover from current lows on a close back above 102.00. However, the 4-hour chart still hasn't signaled any upside bias just as yet. Following the low formed below 101, USDJPY needs to bounce off the current level to form a higher low on the pullback. As such, watch for 102 level acting as resistance in the near term. A confirmed break down below 101 could see USDJPY extend declines to 100.

GBPUSD Daily Analysis

GBPUSD (1.332): GBPUSD remains firmly above 1.32 despite yesterday's price action being fairly limited. With today's BoE meeting on the horizon, GBPUSD could see some volatility led price moves. Watch for a pullback to the support at 1.32 as the upside bias is likely to continue on a breakout above 1.34 - 1.3488, which would mark the inverse head and shoulders pattern breakout, targeting 1.38 and potentially to 1.40. To the downside, a break down below 1.32 - 1.30 could signal further declines in GBPUSD to 1.280 support.

Gold Daily Analysis

XAUUSD (1351.12): Gold prices were bearish yesterday but formed an inside bar near the 1360 top. A close below yesterday's low at 1347.20 will confirm near term declines with support at 1315.20 - 1300 likely to stall the declines in the near term. On the 4-hour chart, there is a potential for gold prices to retest the 1355 - 1357 price level to test for resistance before declining further. On the intraday basis watch for gold to hold up near 1341.85 - 1340 support.


Source link  
Dollar looks to a new week

The US dollar index will be looking to a fresh week with the possibility of a rebound following last week's sharp declines..

US dollar rebounds as investor nerves cool

The US dollar managed to stem the strong declines after developments from Washington...

EURUSD unstoppable at a 6-month high

The euro surged ahead to a fresh 6-month high earlier this morning as the price was seen tradingþ...


Will UK's wages catch up?

The US dollar extended declines strongly for another day as economic data...

US dollar stays subdued

The latest monthly manufacturing activity report released by the New York Fed yesterday...

US dollar slips on soft inflation figure

The US dollar fell sharply on Friday after data showed that consumer price index rose 0.2%...


US dollar looking weaker

Economic data from the US continued to remain robust with the initial jobless claims declining to 236,000 for the week...

Markets brace for UK Super Thursday

The Bank of England meeting, industrial and manufacturing production numbers and fresh inflation forecasts...

China's consumer prices increase

Consumer price index in China rose 1.2% on an annualized basis in the month of April, managing to beat estimates of 1.1%...

  


Share: