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The Bank of England MPC decision is due at 11 PM GMT. Market is expecting that policymakers leave interest rates at 0.25 %. But what traders and investors should be focused at is how many of policymakers will vote for a hike and how many will be against the hike. Technically the GBP/USD is in uptrend but that can easily change after today's data and MPC official bank rate votes. 1.3270-85 is the important zone (W H3, D H4, ATR projection high) and the price could reject from the zone once the zone is hit. If the price proceeds above the zone 1.3330-1.3365 is the next zone (D H5, historical bearish order block, previous high, W H4) and rejections should happen there too. On the contrary, 1.3015-1.3030 POC (W L4, previous double bottom, historical order block bullish) could spike the price upwards. Due to huge expected volatility targets are between these important zones marked as Daily camarilla levels as shown on the chart

Swiss franc's depreciation against Euro over the past few months has offered some reliefs to policymakers. At the quarterly SNB meeting in September, the members acknowledged the franc is not as overvalued as before. Yet, weak economic and inflation have led the members to remain cautious and maintain the monetary policy unchanged. SNB this month decided to keep the sight deposit rate unchanged at -0.75%, while the target range for the three-month Libor stayed at - –1.25% and –0.25%. The central bank also reiterated the pledge that it would intervene in the foreign exchange market if needed. But, SNB's sight deposit and FX reserve data indicate that less intervention has been adopted recently.

In the accompanying statement, the SNB noted that, during the intermeeting period, Swiss franc 'has weakened against the euro and appreciated against the dollar'. Overall, it 'is helping to reduce, to some extent, the significant overvaluation of the currency'. However, the members stressed the franc 'remains highly valued, and the situation on the foreign exchange market is still fragile'. The SNB reaffirmed the willingness to intervene in the FX market if need, so as to 'reduce the attractiveness of Swiss franc investments and thus ease pressure on the currency'. Since the previous meeting on July, EURCHF has risen +5.8% with the upward momentum accelerated since mid-July. Policy divergence was the key reason for the rally, as the market has raised hopes for the ECB to taper its asset purchase pogrom, while the SNB is determined to keep its policy accommodative.

Inflation and GDP Growth

Inflation has remained subdued. Yet, the SNB lifted its forecast slightly amidst recent depreciation in franc. The central bank expects inflation to reach +0.4% this year and in 2018, up from +0.3% projected in June. Inflation would then accelerate to +1.1% in 2019, up from June's projection of +1%. GDP expanded +0.3% q/q in 2Q17, missing consensus of +0.5%. From year ago, growth was +0.3%, markedly lower than +1.1% as expected. As such, the central bank now sees growth to be 'just under 1%, markedly lower than June's estimate of +1.5%. Leading indicator- KOF business climate index- points to gradual improvement in the growth outlook in the coming quarter.

Less Intervention

FX reserves rose to 716.7B franc in August, from 714.9B franc in the prior month. The mild increase of +0.25% was mostly due to valuation effect. Meanwhile, the sight deposit has been on the fall after rising to a new high in late August.

WTI oil price regained traction in European trading and recovered overnight's mild correction which bottomed at $49.14. The price remains firmly in green for the fourth straight day and broke today above previous high at $49.40, pressuring strong barrier at $49.60 (200SMA) en-route towards psychological $50.00 barrier. Negative US crude stocks data on Wednesday which showed strong build in oil inventories by 5.8 million barrels vs forecasted build of 3.2 million barrels, had little impact on oil price and were offset by report from EIA which estimated that global demand for oil will climb by the most since 2015. Oil price extends its near-term rally from $45.57 trough, on track for probe above $50.00 and attempts towards previous high of 01 Aug at $50.41, to complete $50.41/$45.57 bear-phase. Bullish technicals remain supportive but the price may show hesitation on approach to $50.00 target as slow stochastic is entering overbought territory. Rising 10SMA continues to underpin the action (currently at $48.44) and should ideally contain corrective dips.

Res: 49.60, 50.00, 50.20, 50.41
Sup: 49.14, 48.44, 47.91, 47.59

Crude oil has strongly declined after the commodity monitored the $50 level. Key support is given at 45.40 (17/08/2017 high). Strong resistance can be found at 50.43 (31/07/2017). Expected to show further monitoring of the 50- level short-term bearish move.

In the long-term, crude oil has recovered after its sharp decline last year. However, we consider that further weakness are very likely. Strong support lies at 35.24 (05/04/2016) while resistance can now be found at 55.24 (03/01/2017 high).

Silver has failed to reach strong resistance at 18.65 (17/04/2017 high) while support can be found at 16.58 (15/08/2017 high). The commodity lies in an uptrend channel. Expected to show another leg higher.

In the long-term, the trend is rater negative. Further downsides are very likely. Resistance is located at 25.11 (28/08/2013 high). Strong support can be found at 11.75 (20/04/2009).

Gold is trading lower within uptrend channel. Hourly support is given at a distance 1319 (intradayy low). Hourly resistance is located at 1357 (08/09/2016). Stronger support lies at 1204 (10/07/2017 high). Expected to show continued increase within uptrend channel.

In the long-term, the technical structure suggests that there is a growing upside momentum. A break of 1392 (17/03/2014) is necessary ton confirm it, A major support can be found at 1045 (05/02/2010 low)

Bitcoin is taking a dive after strong interest over the summer. Strong support lies at 3599 (22/08/2017 low). Key resistance can be located at 4921 (01/09/2017 high). Technical picture remains nonetheless bullish as long as key support hold.

In the long-term, the digital currency has had an exponential growth. There are decent likelihood that the asset will reach $10'000.

EUR/CHF's buying pressures are going up and the pair has broken resistance area between 1.1356 and 1.1472. Further medium-term sideways moves are favoured.

In the longer term, the technical structure has reversed. Strong resistance is given at 1.20 (level before the unpeg). Yet, the ECB's QE programme is likely to cause persistent selling pressures on the euro, which should weigh on EUR/CHF. Supports can be found at 1.0184 (28/01/2015 low) and 1.0082 (27/01/2015 low).

EUR/GBP is trading lower. However, as long as prices remain below the resistance at 0.9176 (declining trendline), the short-term technical structure is biased to the downside. Hourly support is given at 0.8982 (12/09/2017). Resistance lies at 0.9306 (29/07/2017 high).

In the long-term, the pair has largely recovered from recent lows in 2015. The technical structure suggests a growing upside momentum. The pair is trading above from its 200 DMA. Strong resistance can be found at 0.9500 (psychological level)

SNB increases its inflation forecasts for 2018

That was not surprising. The SNB did not change its monetary policy this morning. Rates will remain negative at -0.75% and the target range for the 3-month Libor is unchanged at between -1.25% and -0.25%.

Over the summer the Swiss franc weakened against the single currency. Yet, for the time being the CHF remains significantly overvalued even though current levels are the lowest levels in the last two years. The central bank declared in its press release that it will remain active in the FX market.

On top of that markets have now strong expectations towards the ECB regarding the future of the monetary policy. There are definitely strong room for further EURCHF downside risks within the short-term. Indeed, the never-ending Greek issue will soon be back on the table and the Catalonian referendum is weighing on the European cohesion. As a result, we believe that actual EURCHF levels are temporary and are fully reflecting the actual weakness in the Eurozone.

Regarding the Swiss economy, it is still largely resilient despite strong CHF. Recently growth printed lower than expectations for Q2. Annualized inflation is at 0.5% for August and the SNB has revised upwards its forecasts. Unemployment rate remains stable and the SNB is optimistic “The situation on the labour market is gradually improving”.

Cautious needed ahead of BoE rate decision

It has been on a bumpy road since the beginning of the week as investors reacted to various events ranging from the latest progress made on the Brexit bill, accelerating inflation pressure to stalling wage growth. The pound sterling hit 1.3329 on Wednesday up more than 1% since Friday’s close. Nevertheless, the cable quickly reversed gains to return at around 1.32 as traders scale back their bullish GBP bet ahead of today BoE meeting.

The Bank of England is facing a difficult situation where it is facing an acceleration of inflation pressures together with the prospect of a slowdown of the economy, which could be significant should the negotiations with the European Union be harsh. Against the backdrop a potential significant slowdown, the BoE will have no choice but to tolerate temporarily an overshooting of its inflation target in order to avoid suffocating the economy.

As the monetary institution won’t update its inflation and growth forecast this time (one has to wait the November meeting), the question is rather how many MPs will switch sides and join the hawks. GBP/USD is trading sideways ahead of the interest rate decision. Given the sharp appreciation of the pound over the last few days, we think that the risk is skewed to the downside with a possible retracement towards the $1.30 level.