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BOE Inflation Report, Interest Rate and Governor Carneys Press Conference

3 August 2017 07:50 AM BDT
BOE Inflation Report, Interest Rate and Governor Carneys Press Conference
EUR/USD

Forex News: The pair climbed after the worse than expected ADP Non Farm Employment Change and spiked very close to 1.1875. However, most of the Dollar losses were erased soon after and now it seems like bullish pressure is fading.

Technical Outlook

Over the last couple of days, price action slowed down considerably and long wicks started to appear. This is a sign that the uptrend is wavering and that the pair is likely to move lower for the end of the week. The main levels to watch are 1.1875 as resistance and 1.1775 as support, followed by the 50 period Exponential Moving Average. Given the latest price action, we expect to see a touch of support but keep in mind that the main trend is bullish.

Fundamental Outlook

The Euro has a light day ahead and for the US Dollar the only notable release is the Non Manufacturing PMI (also called the Services PMI), scheduled at 2:00 pm GMT. The expected number is 56.9 and usually higher numbers strengthen the USD but the impact is medium, not high.

 

GBP/USD

The pair had similar behaviour to the EUR/USD, first climbing very close to resistance and then erasing most of the losses. Overall yesterday’s session was choppy and without clear direction.

Technical Outlook

The Pound bulls have tried twice to take the pair above the resistance at 1.3250 but the result wasn’t positive. Now the candles have long wicks, showing rejection and the Relative Strength Index is bouncing at its 70 level, suggesting an overbought condition. Today’s direction will depend mostly on the fundamental side but strictly from a technical standpoint, we expect bearish pullbacks.

Fundamental Outlook

At 11:00 am GMT the Bank of England will release their Inflation Report, will announce the Interest Rate (no change expected) and will release the Monetary Policy Summary. Half an hour later, BOE Governor Mark Carney will hold a press conference discussing the Inflation Report. This cluster of events will most likely trigger increased volatility, so caution is recommended until things calm down and a clear direction emerges.

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