The BOE is up today!
Word around is that we’ll see a 25bps rate hike. Will the event help extend GBP/CHF’s uptrend?
Before moving on, ICYMI, yesterday’s watchlist looked at USD/JPY’s broken support zone ahead of U.S. mid-tier report releases. Be sure to check out if it’s still a good play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
ADP Non-Farm Employment Report for July: 324K (210K forecast; 455K previous)
EIA Oil Inventory Change: -17.05M vs. -600K previous; a record fall following OPEC+ output cuts
Australia prints 11.32B AUD trade surplus in June (vs. 11B AUD expected, 11.79B AUD in May) as imports (-3.9%) shrank faster than exports (-1.7%)
Australia’s retail sales volume fell by 0.5% q/q in Q2, their third consecutive decline, as consumers respond to cost-of-living pressures
China Caixin services PMI improved from 53.9 to 54.1 in July, marking the seventh consecutive month in expansion territory
The BOJ launched a second unscheduled bond-buying operation, said it would buy 400B JPY ($2.8B) worth of securities after the 10-year note hit a fresh nine-year high of 0.65%
Germany’s trade surplus widened from 14.4B EUR to 18.7B EUR in June as exports (+0.1% m/m) outpaced imports (-3.4% m/m)
Swiss headline inflation down 0.1% m/m (1.6% y/y) as expected in July, core CPI dipped by 0.2% (-1.7% y/y)
Price Action News
Another day, another chance to see JPY move all over the charts!
In case you missed it, the Bank of Japan (BOJ) launched another unscheduled bond-buying operation after Japan’s 10-year bond yields hit a fresh nine-year high earlier today.
The move weighed on JPY for a while before global growth jitters and overall risk aversion dominated market price action.
The safe-haven yen not only erased its intraday losses but also made new intraday gains against its major counterparts.
Upcoming Potential Catalysts on the Forex Economic Calendar:
Eurozone’s PPI at 9:00 am GMT
BOE’s monetary policy decision at 11:00 am GMT
BOE Gov. Bailey to give a presser at 11:30 am GMT
U.S. Challenger job cuts at 11:30 am GMT
U.S. initial jobless claims at 12:30 pm GMT
U.S. ISM services PMI at 2:00 pm GMT
U.S. factory orders a 2:00 pm GMT
RBA’s quarterly statement at 1:30 am GMT (Aug 4)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
GBP/CHF: 15-min
Who’s ready for the BOE?
If you’ve read our BOE Monetary Policy Statement Event Guide, then you’ll know that the central bank is expected to raise its interest rates by 25 basis points to 5.25%.
An increase in the number of “hold” voters could shift the overall event into a “dovish hike” that may weigh on GBP.
This is bad news for GBP/CHF, which is already testing the S1 (1.1110) Pivot Point as well as the bottom of an ascending channel in the 15-minute time frame.
But if the BOE surprises us with a 50bps rate hike like some traders are pricing in, then we could see a GBP/CHF rally.
GBP demand from a hawkish hike or a more risk-friendly trading environment could extend GBP/CHF’s uptrend.
The pair could bounce from the channel and S1 levels and test the 1.1170 Pivot Point and mid-channel area before finding enough sellers.
Watch this one closely, yo!
