Forex trading uneventful after BOE rate announcement

USDJPY remains under pressure after breaking support: Chart

Charts (6)

The US Dollar was bearish against most of its major pairs on Thursday with the exception of the GBP. On the US economic data front, Housing Starts declined to 1,416K on month in August (1,488K expected), from a revised 1,492K in July. Initial Jobless Claims fell to 860K for the week ending September 12th (850K expected), from a revised 893K in the week before. Finally, Continuing Claims dropped to 12,628K for the week ending September 5th (13,000K expected), from a revised 13,544K in the previous week.   

On Friday, the Leading Index for August is expected to rise 1.3% on month, from +1.4% in July. Finally, the University of Michigan's Consumer Sentiment Index for the September preliminary reading is expected to advance to 75.0 on month, from 74.1 in the August final reading.       

The Euro was bullish against most of its major pairs with the exception of the JPY. In Europe, the European Commission has posted final readings of August CPI at -0.4% on month, as expected. The Bank of England held its interest rate at 0.10%, as expected. The BoE said: "The Committee does not intend to tighten monetary policy until there is clear evidence that significant progress is being made in eliminating spare capacity and achieving the two per cent inflation target. 

Also, the minutes mentioned: Recent domestic economic data has been a little stronger than the Committee expected at the time of the August Report, although, given the risks, it is unclear how informative they are about how the economy will perform further out. The recent increase in Covid-19 cases in some parts of the world, including the United Kingdom, has the potential to weigh further on economic activity, albeit probably on a lesser scale than seen earlier in the year. As in the August Report, there remains a risk of a more persistent period of elevated unemployment than in the central projection.

The Australian dollar was bearish against all of its major pairs. 

The USDJPY slipped in Thursday's trading breaking the 105.10 support level that held in place since August. Look for a continuation lower to test July lows near 104.20 and ultimately 103.45 as the trend remains bearish. A break above 106 resistance would be a bullish signal in a rebound attempt. 

Source: GAIN Capital, TradingView

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