Bank of England’s rate decision is the key release today. Investors are expecting the BoE to cut rates to a record low at 0.25%, in attempts to support the economy that was heavily hit by Brexit and holds at the edge of recession. The expected rate cut would be the first since 2009, with expectations for BoE to resume quantitative easing programme of government bond purchase, worth 375 billion pounds.
The British Pound dipped below 1.3300 handle in late Asian trading, but is still holding within near-term consolidation range below fresh recovery high against US dollar at 1.3369. Markets show hesitation ahead of BoE decision, with likely scenarios of buying pound on rate cut and selling if BoE stays unchanged and all options being on the table.
The US dollar pulled off its fresh lows against the basket of currencies in early Thursday’s trading, but the action is so far seen as correction of near-term weakness, triggered by soft recent US data that signaled possible further delay in Fed’s rate hike action.
The greenback is focusing today’s BoE decision and US Non-Farm Payrolls data, due on Friday, for more clues about near-term direction.
ADP data, released on Wednesday, showing 179K new jobs added in private sector, above forecasted 170K, reinforce expectations for solid numbers of NFP data tomorrow. Forecast for US jobs report for July stands at 180K vs upbeat June’s release at 287K, however, release at / above forecasted levels would give the dollar traction and fuel hopes on possible hike of US interest rates by the end of the year.
Euro/dollar stands above session low at 1.1027 at the beginning of European sesstrading, while cable holds just above low at 1.3279 and dollar/yen trades below session high at 101.65.
Spot gold dipped on firmer dollar during past two sessions, in the pullback so far seen as correction of recent rally that peaked at $1367. The yellow metal hit fresh low at $1349 in late Asian trading, after the dollar was boosted by better-than expected US ADP jobs data. Tomorrow’s Non-Farm payrolls data are now in focus.
Gold maintains positive short-term tone, with renewed safe-haven appeal coming on cooling hopes of Fed’s rate hike soon and persisting uncertainty about global economy.
Crude oil was among top gainers on Wednesday and made the strongest daily gains in past three weeks, also registering first bullish close after being in red for eight days. Price of US WTI oil that eventually broke below psychological $40 support, bounced strongly on Wednesday, driven by surprisingly strong draw of US gasoline stocks, despite US crude oil stocks showed a build of 1.4 million barrels in the past week, against the forecast of 1.6 million barrels draw.
Oil price holds firmly above $40 support, with probe above $41.00 handle, posting fresh recovery high at $41.39.
The move is seen as correction of broader downtrend from early June recovery peaks, with global oversupply and bearish technical studies, suggesting fresh attempts lower, after completion of current correction phase.
Highlights of the day

Asia
Australian Retail Sales disappointed as m/m release fell to 0.1% in June, against forecast at 0.4%, while Q2 Retail Sales came at 0.4%, below forecasted and Q1 release at 0.5%.

Europe
Focus is at Bank of England policy decision, due at 11:00 GMT. As already mentioned, central bank is widely expected to opt for 0.25% rate cut, the first in past six years, after staying unchanged at 0.5% rate and 375B QE in July’s meeting, the first after Britain’s vote to leave the EU.
Uncertainty about today’s BoE action persists, however, recent data showed that the UK economy is weakening further after Brexit.
BoE is also expected to cut growth forecast in the quarterly inflation report and highlight the downside risk, but not expected so far to forecast recession.
Analysts of Bank of America Merrill Lynch suggest 0.25% rate cut and add 50 billion pounds in QE programme.

America
US Weekly Jobless Claims are due at 12:30 GMT and are the highlight of American session. Forecast for today stands at 265K, just below previous week’s 266K release.

Important levels

GBPUSD
Cable eases from recovery high at 1.3369 and retests near-term consolidation floor at 1.3278, which marks the first downside pivot, ahead of Fibo 38.2% at 1.3255. Overall structure is bullishly aligned, with BoE policy decision expected to give clearer signals for near-term direction.
Bullish acceleration above 1.3369/1.3400 would open key short-term resistance points at 1.3480/1.3531 and signal stronger recovery of post-Brexit fall.
Conversely, bearish acceleration below 1.3220 (daily Tenkan-sen) would weaken near-term structure, while loss of daily Kijun-sen line support at 1.3144 will be bearish.
EURUSD
The pair eases further on Thursday, extending pullback from recovery high at 1.1232, where 100SMA capped the action. Wednesday’s close in red gave bearish signal, as extended weakness tested good support at 1.1125 (Fibo 38.2% of 1.0950/1.1232 recovery), which acts as a pivot. Further bearish acceleration could extend to 1.1090 (50% retracement) and 1.1058 pivot (Fibo 61.8%).
Initial resistance lies at 1.1154, while firm break above 1.1200 barrier would sideline near-term bears.
USDJPY
The pair attempts to stabilize above fresh low at 100.66, with narrow near-term consolidation being under way. Overall structure remains firmly bearish and favors final stretch towards psychological 100.00 support and possible extension towards post-Brexit 98.98 low. Focus is on tomorrow’s US NFP data, with dollar-positive release expected to delay bears for stronger correction.
Initial resistance lies at 101.65, followed by 102.00, while the upside triggers lay at 102.81 and 103.26.
CRUDE OIL
US oil bounced strongly on Wednesday and closed above $41.00, after broader weakness found temporary support at $39.25. The move is seen as corrective action that precedes fresh leg lower, as technical studies remain firmly bearish.
First support lies at $40.57, followed by $40.00, with return below here needed to soften near-term structure and re-expose key near-term support at $39.25.
At the upside, session high at $41.39 marks initial resistance, followed by Monday’s high at $41.86. Return above $42.22 (Fibo 38.2% of $47.03/$39.24 downleg) would signal stronger correction., Market News