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Daily Pivots: (S1) 196.25; (P) 196.67; (R1) 197.25; More...

Intraday bias n GBP/JPY stays neutral for the moment. Corrective fall from 199.96 short term top could extend lower. But strong support is expected from 193.99 cluster support (38.2% retracement of 184.35 to 199.96 at 193.99). to bring rebound. On the upside, break of 197.41 support turned resistance will bring retest of 199.96. However, sustained break of 193.99 will raise the chance of near term bearish reversal.

In the bigger picture, price actions from 208.09 (2024 high) are seen as a correction to rally from 123.94 (2020 low). The pattern might still extend with another falling leg. But in that case, strong support should be seen from 38.2% retracement of 123.94 to 208.09 at 175.94 to contain downside. Meanwhile, decisive break of 208.09 will confirm long term up trend resumption.

Key Highlights

• Bitcoin corrected gains and tested the $112,000 support.
• BTC/USD is now recovering toward a bearish trend line with resistance at $117,500 on the 4-hour chart.
• Ethereum is consolidating gains above the $3,250 support.
• XRP price could start a fresh increase if it stays above $2.840.

Bitcoin Price Technical Analysis

Bitcoin price started a downside correction below $115,000 against the US Dollar. BTC tested the $112,000 support and recently started a recovery wave.

Looking at the 4-hour chart, the price climbed above the $113,500 and $114,000 levels. There was a move above the 38.2% Fib retracement level of the downward move from the $119,833 swing high to the $111,913 low.

However, the price is still below the 100 simple moving average (red, 4-hour) and the 200 simple moving average (green, 4-hour). On the upside, the price could face resistance near the $116,800 level.

The next key resistance is $117,500. There is also a bearish trend line forming with resistance at $117,500 on the same chart. It coincides with the 61.8% Fib retracement level of the downward move from the $119,833 swing high to the $111,913 low.

A successful close above $117,500 might start another steady increase. In the stated case, the price may perhaps rise toward the $120,000 level. Any more gains might call for a test of $123,200.

Immediate support is near $114,000. A downside break below $114,000 might send BTC toward the $113,500 support. Any more losses might send the price toward the $112,000 support zone.

Looking at Ethereum, the bulls seem to be in control, and they might soon aim for a move above the $3,880 resistance zone.

Today’s Key Economic Releases

• US Initial Jobless Claims - Forecast 221K, versus 218K previous.

The GBP/USD pair climbed to 1.3355 on Thursday as markets braced for today’s Bank of England (BoE) meeting. Traders are closely watching two key factors: the voting split among Monetary Policy Committee (MPC) members and any signals regarding future rate moves.

The central bank is widely expected to cut interest rates by 25 basis points (bps) to 4.00%. However, there is speculation that some members, such as Swati Dingra or Alan Taylor, could push for a more aggressive 50 bps reduction, as seen in May. Should this occur, particularly if accompanied by a shift away from the BoE’s usual cautious tone, the pound could come under significant selling pressure.

Currently, markets have largely priced in a quarter-point cut. Yet, uncertainty remains around the future path of interest rates. While UK inflation remains elevated at 3.6%, well above the 2% target, the economy is weakening, and the labour market is showing signs of strain.

The baseline scenario suggests the BoE will maintain a gradual, data-dependent approach, with potential quarterly cuts. However, any deviation, such as a more aggressive voting split or dovish guidance, could significantly shift market sentiment.

Technical Analysis: GBP/USD

H4 Chart:

The GBP/USD pair has retraced to 1.3366 in a technical correction. A fifth downward wave towards 1.2942 is likely, potentially followed by a corrective rebound to 1.3366. This outlook is supported by the MACD indicator, with its signal line hovering near zero, signalling that downside momentum may soon resume.

H1 Chart:

A corrective wave is forming following the recent decline. The pair is currently consolidating around 1.3273 –a break above this range could see a push towards 1.3377. However, upon reaching this area, a fresh decline towards 1.3160 is anticipated. A breakdown below this would open the path to 1.2942. This bearish scenario is supported by the Stochastic oscillator, with the signal line below 80 and trending sharply down towards 20.

Conclusion

The pound remains vulnerable ahead of the BoE’s decision, with risks skewed towards further weakness if the central bank adopts a more dovish stance. Technically, the setup points to a resumption of the downtrend, with key levels at 1.3160 and 1.2942 in focus.

Daily Pivots: (S1) 1.1593; (P) 1.1631; (R1) 1.1697; More...

Intraday bias in EUR/USD remains on the upside for the moment. Correction from 1.1829 should have completed with three waves down to 1.1390. Further rally should be seen to retest 1.1788/1820 resistance zone. On the downside, however, break of 1.1526 minor support will dampen this view and bring retest of 1.1390 instead.

In the bigger picture, rise from 0.9534 long term bottom could be correcting the multi-decade downtrend or the start of a long term up trend. In either case, further rise should be seen to 100% projection of 0.9534 to 1.1274 from 1.0176 at 1.1916. This will remain the favored case as long as 1.1604 support holds.

Daily Pivots: (S1) 146.93; (P) 147.41; (R1) 147.83; More...

Intraday bias in USD/JPY remains neutral for the moment. As long as 145.84 support holds, larger rebound from 139.87 is still in favor to continue. On the upside, above 148.07 minor resistance will bring stronger rebound back to retest 150.90. However, on the downside, firm break of 145.84 support will argue that whole rise from 139.87 might have already completed. Deeper fall should then be seen to 142.66 support for confirmation.

In the bigger picture, price actions from 161.94 (2024 high) are seen as a corrective pattern to rise from 102.58 (2021 low). Decisive break of 61.8% retracement of 158.86 to 139.87 at 151.22 will argue that it has already completed with three waves at 139.87. Larger up trend might then be ready to resume through 161.94 high. In case the corrective pattern extends with another fall, strong support is expected from 38.2% retracement of 102.58 to 161.94 at 139.26 to bring rebound.

Daily Pivots: (S1) 1.3303; (P) 1.3336; (R1) 1.3389; More...

GBP/USD's break of 1.3363 support turned resistance suggests that correction from 1.3787 has completed with three waves down to 1.3140. Intraday bias is back on the upside for 1.3587 resistance. Firm break there will target 1.3787 high. On the downside, though, below 1.3258 will bring deeper fall back to 38.2% retracement of 1.2099 to 1.3787 at 1.3142.

In the bigger picture, up trend from 1.3051 (2022 low) is in progress. Next medium term target is 61.8% projection of 1.0351 to 1.3433 from 1.2099 at 1.4004. Outlook will now stay bullish as long as 55 W EMA (now at 1.3049) holds, even in case of deep pullback.

Daily Pivots: (S1) 0.8044; (P) 0.8069; (R1) 0.8089; More….

Intraday bias in USD/CHF remains neutral and outlook is unchanged. On the downside, below 0.8020 will affirm that case that corrective bounce from 0.7871 has completed at 0.8170. Bias will be back on the downside for 07871/7910 support zone. On the upside, though, break of 0.8170 will resume the rise from 0.7871 to 38.2% retracement of 0.9200 to 0.7871 at 0.8379 instead.

In the bigger picture, long term down trend from 1.0342 (2017 high) is still in progress. Next target is 100% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.7382. In any case, outlook will stay bearish as long as 0.8475 resistance holds.

Daily Pivots: (S1) 0.6474; (P) 0.6491; (R1) 0.6521; More...

AUD/USD is still staying below 0.6528 resistance and intraday bias remains neutral. On the upside, firm break of 0.6528 will indicate that corrective pullback from 0.6624 has completed at 0.6418. Intraday bias will be back on the upside for retesting 0.6624. On the downside, break of 0.6418 will resume the fall to 38.2% retracement of 0.5913 to 0.6624 at 0.6352.

In the bigger picture, there is no clear sign that down trend from 0.8006 (2021 high) has completed. Rebound from 0.5913 is seen as a corrective move. While stronger rally cannot be ruled out, outlook will remain bearish as long as 38.2% retracement of 0.8006 to 0.5913 at 0.6713 holds. Nevertheless, considering bullish convergence condition in W MACD, even in case of another fall through 0.5913, downside should be contained above 0.5506 (2020 low).

Mr. Trump continues to shape the world to his taste: he has doubled tariffs on Indian imports to 50% because he doesn’t want them to buy oil from Russia. Mr. Rubio, from his negotiation team, gently met with the Swiss delegation — and when I say delegation, I mean two Federal Councillors, including the President herself — to leave the tariffs unchanged at 39%. But hey, the meeting was nice and open to further talks.

Further talks, however, won’t ease worries about the 150–250% tariffs that Trump wants to impose on pharmaceutical imports, and both India and Switzerland are highly concerned. Looking at the car industry — another big victim of the Trump administration — tariffs eventually settled at more reasonable levels, so the hope here is that the same will happen with drugmakers. But of course, because one man decides everything as he wishes — and no one can stop him — uncertainty and lack of visibility will remain on the menu for years to come.

Then, Apple agreed to invest an extra $100bn in US production facilities to please Mr. Trump and ease his rage — because he doesn’t want iPhones produced in China... nor in India! This brings Apple’s total investment promise to a whopping $600bn. Apple shares reacted to the news with a 5% rebound yesterday, showing investors were more relieved to see Tim Cook stay friends with the White House than worried about the company’s margins being smashed by the inevitably higher cost of producing iPhones in the US — note that labour and assembly costs for an iPhone would be at least 10 times higher on US soil.

So, what will probably happen — and I think this is the catch — is that Apple will invest hundreds of billions into US factories, and make sure they are highly automated to require ever less labour. That’s great for AI enablers, of course, but maybe not so great for jobs, which are already taking a hit from the combined impact of AI and trade chaos.

Speaking of AI, the US remains a few years ahead of its closest rival — China — and AI remains one safe space for investors, as Jensen Huang managed to woo the White House over chip exports to China. Jensen says that if the US stops exporting chips to China — and they’re not even exporting the best — the Chinese will just speed up their innovation. Trump has now announced 100% tariffs on chip imports but TSMC, which builds Nvidia chips, will be exempt, because they’re investing in the US. And any other firm investing in the US will also be exempt from the big tariffs. What a world. TSMC just rallied more than 4% to a fresh record high today in Taiwan.

Zooming out to a broader perspective, the US 10-year bond auction saw weak demand yesterday, following a soft 3-year auction the day before. The 10-year yield briefly spiked to 4.28%, but has eased since, while the 2-year yield remains under pressure from rising dovish Federal Reserve (Fed) expectations. The Fed is now expected to deliver its next rate cut as early as September, and with the changes Trump is preparing at the heart of the FOMC, the Fed may be cutting rates despite rising inflation.

And the rising inflation problem is an easy fix — if you just tweak the numbers to make inflation look cooler than it really is. Yet, if investors start believing that US inflation numbers are no longer credible, the $2 trillion TIPS market — Treasuries that track US inflation — could crack. That, in turn, would likely weigh on the US dollar and boost demand for alternative inflation-protection assets like gold, and for some, Bitcoin. Although there’s no statistical evidence that Bitcoin is a good inflation hedge. In fact, the correlation between Bitcoin and US inflation was near flat from 2021 to 2023 — Bitcoin behaves more like a risk asset.

That said, Bitcoin will likely continue to do well alongside tech stocks, regardless of inflation.

Elsewhere, the US dollar is weakening on the back of trade news and dovish Fed expectations. The dollar Index slipped below the 38.2% Fibonacci retracement of its summer rally, marking the end of the summer’s upward trend. It’s pushing below the 50-DMA this morning and could extend losses given the dovish divergence between the Fed and other central banks — where dovishness remains, but is already priced in.

The Bank of England, for example, is expected to announce a 25bp rate cut today, but the vote split will be the major talking point — with rising risks to both inflation and the labour market amid Trump tariffs and Reeve’s tax hikes. Seven out of nine MPC members are expected to vote for a cut, one will likely push for a larger cut, and one is expected to stay put. Another 25bp cut is expected in November, but it will be interesting to see if inflation risks threaten that move.

Any hawkish surprise – that will play around the language about ‘gradual and careful rate cuts’ - could help support cable, which is rising above its 100-DMA this morning on US dollar weakness. But sterling’s weakness is more obvious against the euro, where the EURGBP is pushing toward its highest level since end-2023, driven by the UK’s deteriorating economic outlook and rising inflation risks, with little room for more fiscal support, and likely more tax hikes in a country already struggling with the recent fiscal squeeze.

In focus today

Today we get Swedish flash estimates for inflation in July, where we expect that CPIF will rise to 3.17% (RB 2.50%) and that CPIFxE will decline to 3.06% (RB 2.84%). A 'low' core number would support expectations of an H2 rate cut given that real activity data continues to underdeliver. A 'high core number' would fortify the Riksbank's stagflation dilemma, and while it could send rates and the SEK higher it would probably not fully erase expectations of later cuts. Our base case is that the policy rate will not go below 2.0%, although we have argued that the risk is clearly skewed to the downside.

The Bank of England is expected to lower the Bank Rate by 25bp to 4.00%, aligning with market and consensus expectations. Recent data has been a mixed, with labour market showing more pronounced signs of cooling, weaker than expected growth but inflation surprising to the topside. For more on our take see Bank of England Preview - On track with easing, 4 August.

Economic and market news

What happened overnight

In China, July trade data outperformed forecasts, with exports rising 7.2% y/y, surpassing expectations of a 5.4% increase. Imports also surprised, growing 4.1% y/y against expectations of a 1.0% decline. This led to a narrower trade surplus of USD 98bn, down from USD 115bn in June. The export surge was driven by a rush to ship goods ahead of the 12 August US tariff deadline, while stronger imports suggest tentative improvements in domestic demand.

What happened yesterday

In the euro area, retail sales rose by 3.1% y/y in June, surpassing the expected 2.6% y/y, driven by a continued rebound in domestic consumption. Monthly retail trade volume increased by 0.3% m/m, slightly below the expected 0.4%, though this follows upward revisions to previous months' weak figures. The annual growth was primarily supported by a 4.3% rise in non-food product sales and a 4.0% increase in car fuel sales, reflecting the bloc's resilience to trade uncertainty.

Trump announced an additional 25% tariff on Indian imports, raising the total tariff rate to 50%. The announcement followed a meeting between Putin and US's Witkoff, which Russian official described as productive. This move underscores Trump's ongoing efforts to target countries engaged in direct or indirect imports of Russian oil, where he has accused India of financing Russia's war in Ukraine via its oil imports. The additional tariffs are scheduled to take effect on 27 August.

Equities: Equity markets rallied yesterday in a session light on macro headlines but rich on micro developments, including another Trump-related twist that is becoming a near-daily fixture for market participants.

Equities advanced across the board, but what stood out was the relative performance within sectors. Healthcare notably lagged, despite (or rather, because of) the noise surrounding it.

While Novo Nordisk reported results, the broader driver was renewed unease about sector-specific tariffs - particularly given lingering uncertainty around pharma trade between the US and EU, despite the recent broader trade agreement. The moves were not just Europe-specific or earnings-driven. In the US, healthcare was the worst-performing sector on the day. The divergence was particularly striking when comparing healthcare with consumer staples both typically considered defensive. Yesterday alone, healthcare underperformed staples by nearly 3%, a rare daily spread of that magnitude within defensives. Asian markets are trading higher this morning, and the tone remains positive in US and European equity futures.

FI and FX: Yesterday, the US yield curve steepened from the long end as 30Y yield rose some 4bp, while 2Y yields declined 2-3bp. This was driven by a weak 10Y US Treasury auction and that the US will sell USD 25bn in the 30Y segment today.