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The British pound continues to trade to the downside against the U.S dollar, after the pair was sold aggressively from the 1.3606 level on Wednesday. The GBPUSD pair currently trades around the 1.3560 level, after running into strong technical selling ahead of today’s Bank of England Policy Meeting. Traders are likely to remain focused on the 1.3500-1.3600 trading-range, ahead of today’s crucial interest rate decision and policy statement from the BOE.

The GBPUSD pair remains bearish while trading below the 1.3592 level. Key support is currently located at the 1.3542 and 1.3500 levels.

If the GBPUSD pair starts to trade above the 1.3592 level, key resistance is located at the 1.3606 and 1.3660 levels.

Last week, bitcoin was in a bullish mode, rising to $9,722, which was the highest level since mid-March. This week, it lost some of those gains and reached a low of $8900. The selling pressure came as traders reacted to negative crypto opinions from three influential figures within the finance sector: Charlie Munger, Warren Buffett, and Bill Gates

Today, bitcoin is trading slightly higher following bullish comments from the president and CEO of Nasdaq, Adena Friedman. Nasdaq is currently the second largest exchange in the world by market capitalization following only the New York Stock Exchange.

In an interview with CNN, Adena said that bitcoin was the, “right next step in the space of currency because a globalized payment mechanism is a natural fit for the cross-border digital economy.”

Friedman’s comments came less than 24-hours after West Virginia completed its first blockchain-powered election. This was the first time such technology was applied in the voting process.

Bitcoin is now trading at $9250, which is higher than the weekly low of $8900. The BTC/USD pair could continue the upward momentum and possibly test the $9380 resistance.

Economic data and monetary policy will draw headlines on Thursday, with none more noteworthy than the Bank of England's interest rate decision. The BOE is widely expected to stand pat on monetary policy this month but could provide important information about the pace and timing of future rate adjustments.

The European session kicks off at 08:00 GMT with a report on Italian industrial production. Factory output in the Eurozone's third-largest economy is forecast to grow 0.4% in March after falling 0.5% the month before.

Britain's Office for National Statistics will report on manufacturing production, industrial production and trade at 08:30 GMT. Manufacturing output is forecast to rise 2.9% annually in March. Industrial output is projected to grow 3.1% over the same period.

London's goods trade deficit with the rest of the world is expected to grow to £11.25 billion from £10.2 billion.

The BOE rate decision will be announced at 11:00 GMT via Monetary Policy Summary that will be posted on the Bank's official website. The main interest rate is forecast to hold steady at 0.5%. The asset purchase facility is also expected to remain unchanged at £435 billion.

Shifting gears to North America, the Department of Labor will release a pair of closely watched reports on Thursday, including weekly jobless claims and the April consumer price index (CPI).

Consumer inflation in the world's largest economy likely rose 0.3% month-on-month, which translates into an annualized gain of 2.5%. Excluding food and energy, CPI likely rose 2.2% year-over-year.

North of the border, Statistics Canada will report on the new housing price index at 12:30 GMT. New home values in Canada are forecast to have flatlined during March after slipping 0.2% the month before.

Washington's Financial Management Service will wrap up the Thursday session with the monthly budget statement.

EUR/USD

Europe's common currency bounced from a double-bottom formation on Tuesday, although the underlying picture remains firmly rooted to the downside. EUR/USD is currently trading at 1.1864, having declined some 500 pips from three weeks ago. US CPI data on Thursday should provide the next catalyst for the trade.

GBP/USD

Cable will look to UK data and BOE policy for direction on Thursday. GBP/USD is now trading at 1.3555, with prices somewhat stabilizing following a prolonged downtrend. The pair continues to face strong resistance up ahead at 1.3600. On the downside, the psychological 1.3500 level provides a key barrier of support.

USD/JPY

USD/JPY has snapped back to health after a tumultuous start to the week. The pair is back to trading in the 109.66 region, with the bulls eyeing a re-test of the 110.00 level. Traders can expect resistance at the psychological price point. On the flipside, immediate support is located at 109.20.

General Trend:

• Asian equities trade generally higher
• Energy shares outperform, track gains in oil prices
• Toyota rises over 1.5% after earnings report and guidance
• Softbank declines over 2% post earnings
• China CPI eases again, while PPI accelerates
• RBNZ reiterates policy to remain expansionary for considerable period of time; Kiwi declines to 5-month low
• BoJ Gov Kuroda seeks to clarify stance on timing of reaching inflation target
• Malaysia opposition party wins election, new PM to get sworn in tomorrow, regional leaders paying close attention
• Malaysia Ringgit currency forwards decline after surprise election results
• Philippines Central Bank is expected to later today raise rates for the first time since 2014
• Israel confirmed Iranian forces in Syria fired rockets in Golan

Headlines/Economic Data

Japan

• Nikkei 225 opened +0.3%; closed +0.4%
• (JP) Japan Investors Net Buying of Foreign Bonds: -¥363.7B v +¥533.6B prior week; Foreign Net Buying of Japan Stocks: -¥0.3B v +¥283.5B prior week
• (JP) Japan Apr Bank Lending Ex-Trusts y/y: 2.1% v 1.9%e; Including-Trusts y/y: 2.0% v 1.9%e
• (JP) Japan Mar Current Account Balance: ¥3.12T v ¥2.89Te; adj Current Account: ¥1.77T v ¥1.63Te
• (JP) Bank of Japan (BoJ) Summary of Opinions for April 26-27 policy meeting: Worried that dropping phrase on timing for hitting price goal could weaken commitment to hitting price goal; If BoJ hikes rates that will hurt corporate profits via Yen rise, hurt financial institutions by increasing credit costs.
• FujiFilm, 4901.JP Says has not received new proposal from Xerox: If we receive new proposal will need to study whether it offers value to shareholders
• (JP) Bank of Japan (BOJ) Gov Kuroda: Reiterates to continue powerful monetary easing; do not set any deadline for hitting price target
• (JP) Japan MoF sells ¥399.6B v ¥400B indicated in 10-yr 0.1% inflation-indexed bonds; avg yield -0.513%; bid to cover 4.02x v 3.38x prior

Korea

• Kospi opened +0.6%
• (KR) South Korea March Tax Rev KRW28.9T v KRW23.6T m/m
• (US) Trump administration officials reportedly preparing to hold Pres Trump-Leader Kim Jong Un summit in Singapore – CNN
• (KR) North Korea govt: had satisfactory consensus on issues discussed with US Sec State Pompeo
• 005930.KR South Korea Antitrust Chief: Current ownership structure of Samsung Group is not sustainable

China/Hong Kong

• Hang Seng opened +0.6%, Shanghai Composite +0.3%
• (CN) China Ministry urges local cities to maintain property curbs – Xinhua
• (CN) China, Japan and South Korea agree to oppose protectionism – Xinhua
• (CN) CHINA APR CPI M/M: -0.2% V -0.1%E; Y/Y: 1.8% V 1.9%E; PPI Y/Y: 3.4% V 3.4%E (first acceleration in 7-months)
• (CN) China is expected to offer to import more US goods during talks due to be held in Washington next week – US financial press
• (CN) China PBoC sets yuan reference rate: 6.3768 v 6.3733 prior
• (CN) China PBoC Open Market Operation (OMO): Injects combined CNY30B in 7-day and 14-day reverse repos v CNY100B prior; Net drain CNY20B v CNY100B prior
• (CN) China credit spreads hit their widest level in nearly 2-yrs this week following new regulations that undermined long-held assumptions about implicit guarantees on debt linked to local govts – FT
• (CN) China Commerce Ministry (MOFCOM): Confirms US and China trade teams keep communication; reiterates China trade to maintain good momentum in 2018
• (CN) China PBoC Gov Yi Gang met with BoJ Gov Kuroda: Confirms the officials reached a consensus on currency swap in principle

Australia/New Zealand

• ASX 200 opened +0.2%, closed %
• (NZ) NEW ZEALAND CENTRAL BANK (RBNZ) LEAVES OFFICIAL CASH RATE UNCHANGED AT 1.75%; To keep OCR at this expansionary level of 1.75% for a considerable period of time
• (NZ) RBNZ Gov Orr: Were in a good spot, risks are balanced; reiterates argument for a rate cut or rise in the future, but rates will stay unchanged for a considerable amount of time; Currency is broadly in line with terms of trade - post rate decision press conference
• (NZ) New Zealand Fin Min Robertson: Planning NZ$42B of net capital investments over 5-yrs
• (AU) Western Australia: To raise surcharge on foreign property purchases to 7%
• (NZ) RBNZ Bascand: Core inflation a bit below where we'd like it

Other Asia

• (MY) According to Malaysia Election Commission, opposition Mahathir alliance won 115 seats, above the 112 seat threshold needed to form a government - Local Press
• (PH) Philippines Q1 GDP q/q: 1.5% v 1.4%e; y/y: 6.8% v 6.8%e
• (PH) Philippines Economic Chief Pernia: GDP could reach target if it werent for CPI; lower end of 7-8% GDP growth range for 2018 is doable

North America

• US equity markets ended mostly higher: Dow +0.1%, S&P500 +0.2%, Nasdaq +0.1%, Russell 2000 -0.1%
• S&P500 Energy +2%, Financials +1.5%; Utilities -0.7%
• COST Reports Apr SSS (ex-gas) 7.3%; US SSS (ex-gas) 7.9% v 6.6%e
• EVHC KKR said to plan bid for Envision which may be worth over $11.0B - NY Post
• (US) DOE CRUDE: -2.2M V 0E; GASOLINE: -2.2M V -0.5ME

Europe

• (UK) Apr RICS House Price Balance: -8% v -1%e (lowest reading since Nov 2012)
• (UK) Ministers reportedly have been warned that Brexit would hurt 145K UK companies and wipe 1.8% off long run UK GDP - Buzzfeed
• (EU) ECB's Lane (Ireland): too soon to tell whether demand slowdown is hitting European economy
• (FR) France Pres Macron: imbalances in the euro zone are not sustainable; The German trade surplus can't last - German TV interview
• (IL) Iran force in Syria said to have fired rockets at Israeli targets in Golan – Israeli Media
• (IQ) Iraq Oil Min Luaibi: OPEC to discuss possible output shortfall following US withdrawal from Iran nuclear agreement
• RBS [RBS.UK]: US Attorney's Office: Reached agreement in principle to settle potential civil claims related to MBS issued from 2005-2008; RBS to pay $4.9B civil penalty
• EDF [EDF.FR]: Reports Q1 Rev €20.4B v €19.7B y/y; Affirms FY18 EBITDA €14.6-15.3B (prior €14.6-15.3B), Net debt/EBITDA <=2.7x (prior <=2.7x)
• ENEL [ENEL.IT]: Reports Q1 net €1.17B v €0.98B y/y, adj EBITDA €3.91B v €3.95Be, Rev €19B v €19.4B y/y; Affirms FY18 Net €4.1B, EBITDA €16.2B (prior Net €4.1B, EBITDA €16.2B)

Levels as of 02:00ET

• Hang Seng +0.7%; Shanghai Composite +0.1%; Kospi +0.6%
• Equity Futures: S&P500 +0.2%; Nasdaq100 +0.3%, Dax +0.1%; FTSE100 -0.0%
• EUR 1.1875-1.1843; JPY 109.92-109.63; AUD 0.7478-0.7454;NZD 0.6946-0.6910
• Jun Gold +0.1% at $1,314/oz; Jun Crude Oil +0.7% at $71.61/brl; Jul Copper +0.2% at $3.07/lb

Iran's President Hassan Rouhani talked with French President Emmanuel Macron in a phone call yesterday, as follow up to Trumps' withdrawal from the nuclear deal. Iranian Students' News Agency quoted Rouhnai saying that "under the current conditions, Europe has a very limited opportunity to preserve the nuclear deal, and must, as quickly as possible, clarify its position and specify and announce its intentions with regard to its obligations." Rouhani also added that "despite what Trump thinks, enrichment in Iran has never been for obtaining a nuclear weapon but instead has been for scientific and technical pursuits."

Separately, Macron said in an interview with Germany's Deutsche Welle broadcaster yesterday that "We stand today at a historic moment for Europe - Europe is in charge of guaranteeing the multilateral order that we created at the end of World War II and which today is sometimes being shaken."

Chinese Vice Premier Liu He will visit Washington next week to resume trade negotiations with the US. Commerce ministry (MOFCOM) spokesman Gao Feng confirmed today during a regular press the officials are preparing for the visit.

But Gao reiterated China's stance in opposing protectionism and unilateralism in trade relations. He warned that "the United States must put away its threatening stick. China's position has not changed and will not change." Gao added that "we hope that China-U.S. trade relations can become a powerful driving force for sustained growth of the global economy."

Separately, GAO also said the bilateral trade between China and Russia expanded quickly in the first four months of 2018. Gao noted "The Russian economy is steadily turning for the better and its market demand is rising, driving China's exports to the country up 21 percent on a yearly basis during the January to April period." According the last data, Sino-Russian trade grew 30% yoy to USD 31.2B between January and April.

The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products stocks fell -1.55 mmb to 1186.18 mmb in the week ended May April 4. Crude oil inventory fell -2.2 mmb (consensus: -0.72 mmb) to 433.76 mmb, amidst falls in 3 out of 5 PADDs. PADD 3 alone saw inventory decline of -2.54 mmb. Cushing stock gained +1.39 mmb to 37.17 mmb. Utilization rate decreased -0.7% to 90.4%. Meanwhile, crude production increased +0.08M bpd to 10.7M bpd for the week.

For refined oil products, gasoline inventory decreased -0.45 mmb to 235.8 mmb as demand jumped +7.54% to 9.78M bpd. This was compared with consensus of a -0.59 mmb drop. Production slipped -0.71% to 9.97M bpd while imports plunged -13% to 0.8M bpd during the week. Distillate inventory fell -3.79 mmb to 115.04 mmb although demand dropped -3.97% to 4.31M bpd. The market had anticipated a -1.38 mmb draw. Production dropped -0.04% to 5M bpd while imports jumped +68.42% to 0.13M bpd during the week.

Released after market close on Tuesday, the industry- sponsored API estimated that crude oil inventory dropped -1.9 mmb during the week. For refined oil products, gasoline distillate fell -2.1 mmb while distillate slumped -6.7 mmb.

Daily Pivots: (S1) 0.7423; (P) 0.7448; (R1) 0.7483; More...

With 0.7559 minor resistance intact, further fall is expected in AUD?USD. Next target is cluster support at 0.7328 (61.8% retracement of 0.6826 to 0.8135 at 0.7326). Sustained break will add more credence to the case of long term down trend resumption and target 0.7158 support next. On the upside, break of 0.7559 resistance, however, will indicate short term bottoming, on bullish convergence condition in 4 hour MACD. Lengthier consolidation would then be seen before another fall.

In the bigger picture, medium term rebound from 0.6826 is seen as a corrective move. Decisive break of 0.7500 key support suggests that such correction is completed at 0.8135. Deeper decline would be seen back to retest 0.6826 low. In case of another rise, we'd expect strong resistance from 38.2% retracement of 1.1079 to 0.6826 at 0.8451 to limit upside to bring long term down trend resumption eventually.

Daily Pivots: (S1) 1.2794; (P) 1.2885; (R1) 1.2944; More....

Intraday bias in USD/CAD remains neutral at this point. As long as 1.2802 minor support holds, further rise is expected. Above 1.2996 will target 1.3124 resistance next. Decisive break there will extend larger rebound from 1.2061. However, break of 1.2802 will at least delay the bullish case, and turn bias back to the downside for 55 day EMA (now at 1.2780) and below.

In the bigger picture, current development suggests that rebound from 1.2061 has not completed yet. Focus is back on 38.2% retracement of 1.4689 to 1.2061 at 1.3065. Sustained trading above there will confirm medium term bullish reversal. That is, down trend from 1.4689 has completed at 1.2061 already. In that case, next target will be 61.8% retracement at 1.3685.

Daily Pivots: (S1) 1.0018; (P) 1.0036; (R1) 1.0070; More...

Despite diminishing upside momentum, intraday bias in USD/CHF stays on the upside with 0.9982 minor support holds. Current rise should extend to 1.0342 key resistance next. On the downside, though, below 0.9982 minor support will indicate short term topping, on bearish divergence condition in 4 hour MACD. And, in that case, deeper retreat could be seen, possibly to trend line support (now at 0.9748) before staging another rally.

In the bigger picture, medium term decline from 1.0342 has completed with three waves down to 0.9186. Rise from there is currently viewed as a leg inside the long term range pattern. Hence, while further rally would be seen, we'd be cautious on strong resistance from 1.0342 to limit upside. For now, further rise is expected as long as 0.9648 resistance turned support holds, even in case of pull back.