The British pound stays tall in early Friday trading, trading off Thursday’s fresh two-week high at 1.3480 hit after surprising decision of Bank of England to keep interest rates unchanged, despite widely expected rate cut.
Sterling rallied over 2% after BoE’s announcement and is also on track for strong weekly gains of nearly 3% that would mark the best weekly performance in past couple of years.
However, BoE left the door open for action in August, confirming BoE Governor Carney’s comments on policy easing action during the summer.

Japanese yen, on the other side was the top loser on Thursday and posted three-week low against US dollar at 106.30. The pair surged towards key barrier at 106.78, as yen lost its safe-haven appeal on improving risk sentiment and speculation that Japanese policymakers could adopt stronger monetary stimulus.
The yen was also pressured in early Friday’s trading by solid Chinese data that signal stabilization in China’s economy and boosted risk sentiment.
Dollar/yen is on track for strong weekly close, last seen in 2013.
Australian dollar maintains strong bullish sentiment and holds near fresh 10-week high against the greenback, following several attempts above key short-term resistance at 0.7645. Positive Chinese data support Aussie, which is on track for the seventh consecutive bullish weekly close.
The Euro holds above former strong barrier at 1.1100, following yesterday’s spike to fresh 10-days high at 1.1163 and final close above very significant 200MA barrier. Focus is on EU inflation data, as well as series of important economical releases from the US that would influence pair’s near-term price action.
Gold remains at the back foot and consolidates above fresh two-week low at $1320, as renewed risk sentiment and surge in global stocks eased demand for safe-haven yellow metal. Gold is on track for strong bearish weekly close, last seen in Nov 2015, after six consecutive weeks of rally

Highlights of the day

Asia
Upbeat data from China showed that the economy is stabilizing. Q2 GDP beat the forecast on 6.7% release, along with Retail sales and Industrial Production that came well above forecasted levels.
June Retail Sales beat 10.0% forecast on 10.6% release, while IP came at 6.2% in June, above forecasted 5.9% and May’s 6.0% release.

Key overnight releases came from Australia, with Employment Change showing strong fall in June on 7.9K release, well below May’s 19.2K and also below 10.1K forecast.
Australia’s Unemployment rate ticked higher to 5.8% in June, according to the forecast, from May’s 5.7%.

Europe
European inflation data are the highlight of the session, after EU countries released their individual data during the week. Forecast shows unchanged figures for June, with Y/Y release expected at 0.1% and M/M at 0.2%.
Data are due at 09:00 GMT.
America

Inflation data are also the highlight of the American session, with seasonally adjusted M/M CPI expected to tick to 0.3% in Jun from May’s 0.2%.
US Retail Sales are expected to fall to 0.1% in Jun, compared to May’s 0.5% release, while Core Retail Sales are expected to stay unchanged at 0.4%.
Data are due at 12:30 GMT.

Important levels

GBPUSD

Bullish near-term technicals maintain upside momentum, as the pair consolidates under fresh high at 1.3480, posted on Thursday and retested in Asia. Near-term focus is at key resistance at 1.3531 (recovery peak of 29 June, above which would signal stronger correction of post-Brexit fall and expose nxt barrier at 1.3645.
On the downside, immediate support lies at 1.3323, followed by 1.3276 and 1.3245, downside pivot.
USDJPY
Strong bullish sentiment moved the pair to fresh high at 106.29, with key short-term barrier at 106.78 being in near-term focus. Break higher would open targets at 107.89 and 108.50 in extension.
First support lies at 105.00, followed by strong hourly higher base support at 103.90.
AUDUSD
Consolidates under fresh high at 0.7673, posted after key 0.7645 barrier was cracked. Weekly close above 0.7645 is needed to confirm break and trigger further extension of uninterrupted six-week rally. Next barriers lay at 0.7717 and 0.7763, ahead of key 0.7833 barrier, peak of Apr 2016.
Initial support lies at 0.7606, followed by 0.7558 and 0.7532.

EURUSD
The pair holds stable above broken 200SMA barrier at 1.1100 zone, above which it ended Thursday’s trading. Strong bullish signal was generated for further upside action through yesterday’s spike high at 1.1163 and pivotal 1.1167/85 barrier, towards next upside target at 1.1228.
Former breakpoint at 1.1100 zone, now marks initial support, followed by 1.1040 and downside pivot at 1.1000., Market Analysis