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Today is 'Super Thursday' in the UK. Besides the BoE rate decision and the meeting minutes, we also get the quarterly Inflation Report, which Governor Carney will present at a press conference after the meeting. The consensus is for the Bank to keep its policy unchanged via a 6-2 vote. Given that the votes are the first piece of information we get, we expect the initial reaction in GBP to depend primarily on that, and subsequently, on what signals policymakers send regarding the likelihood of a rate hike this year.

At its latest meeting, the BoE appeared quite hawkish, signaling reduced tolerance for above-target inflation (CPI was +2.9% yoy at the time). A few days later, Governor Carney and Chief Economist Haldane both hinted that a rate hike may be in the works at one of the upcoming meetings. Nevertheless, soon thereafter, data showed that inflation slowed notably (to +2.6% yoy), pouring cold water on speculation for an immediate rate increase. What's more, although the labor market continued to tighten, both wage and GDP growth remain lackluster, enhancing the case for no action by the BoE this year.

At the time of writing, market pricing suggests roughly a 45% probability for a hike by year-end, which we think is reasonable given the data. The key question for GBP traders is: Will that probability rise or fall in the aftermath of this 'Super Thursday'? On balance, we think it's more likely to fall. The slowdown in inflation combined with uninspiring growth suggest that the BoE could signal less urgency than previously for a near-term hike. In addition, given the softness in Q2 GDP, there is a prospect for the Bank to revise down its growth forecasts. Bearing these in mind, we believe that the reaction in sterling today could be negative.

The key risk to our view is that despite economic developments suggesting a relatively low likelihood for a hike in the near-term, the BoE may want to keep speculation on that front alive in order to support the pound and thereby, curb inflation. In this case, Carney could say that the MPC discussed the prospect of a hike, but decided against it for now. Such signals, or a potentially closer-than-expected vote, could cause GBP to strengthen.

EUR/GBP has been trading in a consolidative manner during the last couple of weeks, between the support of 0.8890 (S2) and the resistance of 0.9000 (R2). Nevertheless, the overall path of the pair remains positive as marked by the uptrend line taken from the lows of November 2015. As such, we expect the bulls to drive the battle above the psychological barrier of 0.9000 (S2) in the not-too-distant future and initially aim for our next resistance of 0.9050 (R3). The trigger for such a rally could be a dovish BoE today. Even if the Bank appears hawkish and the pair tumbles, we would treat such a retreat as a corrective phase.

GBP/USD has been in an uptrend mode since the 21st of June. At the time of writing, the pair oscillates between the support of 1.3190 (S1) and the resistance of 1.3250 (R1). A dovish BoE today could cause the pair to tumble, but given that we expect the greenback to continue performing worse than the pound in the foreseeable future, we expect the bulls to take advantage of a potential retreat and aim for another test near 1.3250 (R1). Now, in case the Bank remains hawkish, the pair could break above 1.3250 (R1) without correcting lower. Such a break is possible to pave the way for our next resistance of 1.3350 (R2).

As for today's economic data:

As for the economic data, we get the UK services PMI for July and expectations are for an uptick. Even though something like that could support GBP a bit, the currency's intraday direction is likely to be decided by the BoE a couple of hours later. We also get Eurozone's final Markit services PMI for July and the bloc's retail sales for June. In the US, the ISM non-manufacturing PMI for July will be in focus. The forecast is for the index to have declined slightly, which may bring USD under renewed selling interest.

EUR/GBP

Support: 0.8920 (S1), 0.8890 (S2), 0.8830 (S3)

Resistance: 0.8975 (R1), 0.9000 (R2), 0.9050 (R3)

GBP/USD

Support: 1.3190 (S1), 1.3160 (S2), 1.3100 (S3)

Resistance: 1.3250 (R1), 1.3350 (R2), 1.3440 (R3)

Daily Pivots: (S1) 1.1423; (P) 1.1473; (R1) 1.1562; More...

EUR/CHF's really resumed after brief retreat and reaches as high as 1.1523 so far. 200% projection of 1.0652 to 1.0986 from 1.0830 at 1.1498 is already met but there is no clear sign of topping yet. Intraday bias is back on the upside and firm break of 1.1498 will target 261.8% projection at 1.1704 next. Nonetheless, considering bearish divergence condition in 4 hour MACD, break of 11385 support will indicate short term topping and bring lengthier consolidation first.

In the bigger picture, sustained break of 1.1198 key resistance confirms resumption of the long term rise from SNB spike low back in 2015. In this case, EUR/CHF would eventually head back to prior SNB imposed floor at 1.2000. For now, this will be the favored case as long as 1.1087 resistance turned support holds.

The Euro is consolidating in mid 1.1800 zone in early Thursday’s trading after bulls cracked 1.1900 barrier and posted new high at 1.1910 in late Wednesday (the highest since Jan 2015).

Mixed Services PMI numbers from the Eurozone did not impact the price significantly, with near-term focus on EU Retail Sales and Friday’s US jobs data.

The pair is trading is strongly overbought conditions which continue to warn of pullback (slow stochastic and RSI are emerging from o/b territory on daily chart, accompanied with strong upside rejection yesterday).

Broken bull-channel resistance line continues to support and contained past two days dips, marking initial support at 1.1820.

Dip-buying strategy remains favored for final push towards target at 1.2000, with near-term action likely to remain quiet ahead of US data tomorrow, which are expected to generate stronger signal.

Res: 1.1860, 1.1910, 1.1950, 1.1975
Sup: 1.1820, 1.1793, 1.1769, 1.1745

Today's analysis is about AUDUSD and its daily time progress.

We can see that Aussie is trading in a bigger three-wave correction , since November of 2015 when a higher degree impulsive wave III had ended. Current choppy and overlapping price activity is now labeled as an ongoing corrective wave IV, that can be trading in final stages. We can see sub-waves A and B already completed, which means current bullish, sharp movement is sub-wave C, that can end near the Fibonacci ratio of 50.0 and near previous swing high at 0.8161 level. From the mentioned region, a new reversal lower could come in play.

AUDUSD, Daily

In the second half of Wednesday the Greenback appreciated against all major currencies, including the gold. Most probably, it was related to the sanctions bill as well as high earnings posted by large American companies. In any case, the downside momentum was strong enough to drive the pair through the bottom trend-line of an ascending channel. Fortunately for the yellow metal, the barrier set up by the weekly PP at 1,261.94 and that became additionally secured by the approached 200-hour SMA managed to stop the downfall and even forced the pair to make a rebound. As a result, today the bullion will try to get back into formation, break through the 55- and 100-hour SMAS and try to reach the 1,272.24 level. Various technical indicators support this scenario, pointing out the pair is oversold.

Key Highlights

• Gold price after trading towards $1275 found resistance and declined sharply against the US Dollar.
• There are two important bullish trend lines forming with supports at $1258 and $1255 on the 4-hours chart of XAU/USD.
• Today, the Caixin China Services PMI for July 2017 was released, which posted a minor decline from 51.6 to 51.5.
• The US Services PMI will be released today for July 2017, which is slated to remain at 54.2.

Gold Price Technical Analysis

Gold price is in a solid uptrend and trading comfortably above $1250 against the US Dollar. The price after trading as high as $1274 started a correction and currently testing a major support.

It has already moved below the 23.6% Fib retracement level of the last wave from the $1243.77 low to $1274.15 high. However, the downside move was protected by the $1255 support.

There are two important bullish trend lines forming with supports at $1258 and $1255 on the 4-hours chart of XAU/USD. Moreover, the 50% Fib retracement level of the last wave from the $1243.77 low to $1274.15 high is at $1258.

All these are important supports near $1255-60. As long as these are intact, there are chances of Gold resuming its uptrend back towards $1270 in the near term.

Caixin China Services PMI

Today, the Caixin China Services PMI for July 2017 was released. The market was looking for an increase in the PMI from the last reading of 51.6 to 51.9.

However, the actual result was opposite, as there was a minor decline from 51.6 to 51.5. On the other hand, the Composite Output Index posted a decent rise from June's low of 51.1 to 51.9 in July 2017, which is a new four-month high.

The report added that:

New business also expanded at a weaker pace across the service sector in July. Furthermore, the rate of growth edged down to the least marked for 16 months, with some panellists linking relatively subdued sales to lower client numbers.

Overall, the result was positive, and helped Gold to remain above the $1255-60 support area.

Today's Economic Releases during NY Session

• US Services PMI for July 2017 - Forecast 54.2, versus 54.2 previous.
• US ISM Non-Manufacturing Index for July 2017 - Forecast 57.0, versus 57.4 previous.
• US Initial Jobless Claims - Forecast 242K, versus 244K previous.
• US Factory Orders June 2017 (MoM) - Forecast +2.8%, versus -0.8% previous.

Yesterday the USD/JPY failed to soar towards the weekly PP at 111.15. The reason behind the 53-pips drop, most probably, was attributed to the 200-hour SMA that created an impassable resistance barrier. Nevertheless, from the other side the fall of the rate was also constrained by the 55-hour SMA near 110.43. Since the pair proved to be sensitive to these two technical indicators, they can be temporarily marked as closest support and resistance levels, between which the pair is expected to move during today's trading session. However, given that the upside momentum hasn't come to an end yet, the buck most likely is going to continue to try to move to the top. A necessary impulse might be given by announcement of the US ISM Non-Manufacturing PMI and Factory Orders at 14:00 GMT.

In late Wednesday, the currency exchange rate made an attempt to break from a supposed head and shoulders pattern. However, the weekly R1 at 1.3200 once again proved to be a very meaningful barrier for the Pound. To certain extent, the rebound was also triggered by the approached 55-hour SMA that has additionally strengthened the above support level. From a technical perspective, the rest of the day the pair should spend in the surge towards the weekly R2 at 1.3264. However, at 14:00 GMT the Bank of England will announce the Official Bank Rate and, afterwards, Governor Carney will make remarks about this decision. Depending on the result, the Pound might surge or fall by 60-110 basis points, which means that it might be thrown from the currency ascending channel by traders' reaction.

In line with expectations, during the previous trading session the currency exchange rate managed to soar to the weekly R2 at 1.1878 and made a subsequent rebound from it. Despite the 23-pip depreciation of the Euro, the pair did not fall beyond the 55-hour SMA near 1.1828, as it was additionally protected by the support line of a rising wedge. Hence, in first half of Thursday, the rate is expected to resume the surge towards the above weekly R2. However, then two scenarios might happen. Either the pair will bounce off from it and, thus, repeat yesterday's scenario, or it will succeed to break to the top and, thus, continue to gradually move within the active pattern. The seconds scenario seems more realistic, especially taking into account that the rate continues to move along the above 55-hour SMA.

The release of the country's trade balance figures failed to provide any support for the Australian Dollar, with AUD/USD tumbling 0.09% to hit the 0.7928 mark right after the data came out. Following the release, the Aussie continued to weaken against the Greenback, sliding towards the 0.79248 level through the early morning session. The Australian Bureau of Statistics reported the country's trade surplus narrowed more than expected in June, falling sharply to A$856M from the downwardly-revised A$2.02B surplus seen in the previous month. However, despite the weaker-than-expected data, the Australian economy seems to have picked up steam from the sluggish March quarter, as consumer and business spending were seen climbing recently.