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MTrading Team • 2023-06-22

GBPUSD positions for BoE storm with lackluster start

GBPUSD positions for BoE storm with lackluster start

Traders brace for multiple central-bank announcements amid China’s holidays on early Thursday. The same joined market’s indecision about the Sino-American ties and Fed Chair Jerome Powell’s failure to convince US Dollar bulls to offer a sluggish start to the key day.

The same allowed the greenback to lick its wounds as yields pick up bids amid fears that higher rates for a longer time will result in economic hardships. Additionally, the overall tone of Fed Chair Powell’s testimony remains upbeat and hence restricts the USD from declining further.

Elsewhere, Swiss National Bank (SNB) matches market forecasts with a 0.25% rate hike and showed readiness for increasing the benchmark interest rates further. However, the USDCHF failed to cheer the SNB’s hawkish move and rather jumps 50 pips on the news.

With these plays in mind, GBPUSD remains pressured but the AUDUSD drops and EURUSD picks up bids. Further, bounces off the key support near $1,930 whereas Brent Oil prints mild losses as it retreats from the 50-DMA hurdle.

On the other hand, the leading cryptocurrencies manage to please bulls by rising for the fourth consecutive day to refresh the monthly peaks of BTCUSD and ETHUSD.

Following are the latest moves of the key assets:

  • Brent oil pares the biggest daily gains in a week around $77.00.
  • Gold price remains mildly offered near $1,930, challenging three-day downtrend of late.
  • USD Index remains depressed at around 102.05 by the press time.
  • Wall Street closed in the red whereas Asia-Pacific shares edged lower. That said, equities in Europe and UK are on the downside to begin the trading day.
  • BTCUSD and ETHUSD rise for the fourth day in a row to around $30,200 and $1,910 in that order.
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The fun begins…

After a sluggish start to the day, due to China’s holiday and light calendar in Asia, global markets have started being active as Western traders begin the working day.

Among the key catalysts, the SNB’s rate hike and Bank Indonesia’s (BI) inaction joined the second-tier data from Europe to entertain the traders.

Also, cautious mood ahead of the central bank decisions from Turkey, the UK and Mexico tries to placate the momentum traders’ pains.

It’s worth observing that the risk-off mood intensifies as the day passes by and the same will witness more volatility during the hours to come as Fed Chair Powell is also up for the second round of testimony, apart from what is already discussed.

Talking about cryptos, a slew of applications for fresh spot and ETFs license keep the BTCUSD and ETHUSD refreshing the monthly high despite looming SEC-linked fears.

  • Strong buy: USDCAD
  • Strong sell: ETHUSD, GBPUSD, Gold
  • Buy: USD Index, Nasdaq, USDJPY

Central banks in focus

Moving on, major attention will be given to the central bank announcements wherein the Bank of England and the Turkish central bank (CBRT) will be watched closely.

That said, the Bank of England (BoE) is likely to lure the hawks as the previous day’s UK inflation suggests a sustained rise in the core CPI. The same could propel the GBPUSD price in case of a hawkish surprise while the odds of witnessing the Cable’s fall in case of a 0.25% rate increase are also on the table.

On the other hand, Bank of Japan (BoJ) officials keep defending the easy-money policy while the CBRT is up for a bold move with around 1200 bps of a lift to the benchmark rate.

Apart from that the Bank Indonesia is expected to keep the rates unchanged and so do the Mexican central bank (Banxico), which in turn can offer an active session.

Additionally, Eurozone Consumer Confidence and the US jobless numbers are extra details that can offer an entertaining day ahead.

May the trading luck be with you!