Forex Daily Recap – Pound Tanks to a Multiple Year Low as BoE Lowered Growth Outlook

GBP/USD

Today, the Bank of England (BoE) has lowered the growth forecasts for the UK economy as Brexit, and Global tensions kept the tensions intact. Despite that, the policymakers have voted 9-0 to keep the interest rates unchanged at 0.75% as per the market expectation. Quite notably, the BoE seemed to stay away from the notion of cutting the rates like other major Central banks. Also, the BoE Asset Purchase Facility reported £435B, in-line with the previous figures. Another serious concern for the BoE remained the stubborn nature of the UK PM Boris Johnson to execute Brexit with/without a deal on/before October 31.

Laterwards, the BoE Governor Mark Carney attended a news conference to provide his opinions over the BoE’s decision. Carney said, “Preparations by governments and businesses for no deal are vital to reduce the potentially damaging transition costs to a WTO relationship with the EU. But those preparations cannot eliminate the fundamental economic adjustments to a new trading arrangement that a no-deal Brexit would entail.”

Meanwhile, on the technical side, the GBP/USD was stuck near a two-and-a half-year bottom. Additionally, two major counter trendlines stood above the Cable to slaughter any potential upward drifts.

USD Index

Last day’s upliftment had allowed the Greenback to breach the sturdy 98.22 resistance handle and mark a 2-year high near 98.93 level. Anyhow, the US Dollar Index seemed to bit slow down on the backdrop of mixed economic data releases. This time, both the Initial and Continuous Jobless Claim reports missed estimates. Notably, the Continuous Jobless Claims computed since July 19, showcased a 22K growth as compared to the previous data.

Also, the July ISM Manufacturing PMI displayed 1.56% lower than the market hopes of around 52.0 points. Nevertheless, the US Dollar Index continued to remain sustained above the Green Ichimoku Clouds, encouraging the buyer community. Also, the histograms of the MACD was heading to the north with the moving averages above the center line.

AUD/USD

After following a strong 10-day tumbling rally until yesterday, the Aussie pair appeared to make recovery attempts today. Anyhow, the pair continued to remain adhered to the healthy 0.6832 support handle throughout the day.

Meantime, the Australian economic docket showcased quite a few upbeat data releases. Earlier the day, the Q2 QoQ Import and Export Price Index came above the consensus estimates. Also, the July YoY RBA Commodity Index SDR recorded 5.6% higher than the 10.5% forecasts. Even if the pair had made an upside movement, then the stable 0.6881 and 0.6902 resistances would have got activated.

USD/CNY

The Chinese Yuan pair had already broken and made a breakthrough out of the strong 6.8936 resistance handle yesterday. However, a 10-day old slanting ascending resistance ensured to provide traction to the pair’s positive moves.

A triumphant march above the aforementioned slanting resistance would have enabled challenge towards a 6.9315 resistance level. In the meanwhile, the Caixin July Manufacturing PMI came out at around 01:45 GMT. The market had expected this highly crucial Manufacturing Index to report 49.6 points. Somehow, the actual figures reported 49.9 points, pleasing the CNY bulls. Though there was a dip in the RSI figures today, slumping from 70.12 level to 62.22 level, the USD/CNY continued to keep a hold of the accumulated gains.