A day before, the U.S. stocks posted modest gains after the Federal Reserve hinted at taking appropriate action amid uncertainties on the outlook. The Dow Jones Industrial Average gained 38 points (+0.2%) to 26504, the S&P 500 added 8 points (+0.3%) to 2926, and the Nasdaq Composite was up 33 points (+0.4%) to 7987.
While the central bank held its benchmark interest rates unchanged at 2.25-2.50% (as expected), the Fed statement showed that eight out of 17 officials forecast lower rates by the end of 2020.
Key Economic Events Today
GBP/USD - Bank of England In Highlights
The Bank of England will announce its interest rates decision (vs hold at 0.75% expected). The British pound jumped 0.8% to $1.2655, rebounding for a second straight session. Official data showed that U.K. core CPI grew 1.7% on year in May (vs +1.6% expected). On the other hand, the Bank of England is expected to hold its benchmark rate at 0.75% unchanged later today.
Looking at the technical side, the GBP/USD pair may face resistance around 1.2770 along with support around 1.2670. The moving averages are also suggesting a bullish bias. Watch out key trading levels below.
Support and Resistance
R3: 1.2883
R2: 1.2752
R1: 1.2698
Key Trading Level: 1.262
S1: 1.2566
S2: 1.2489
S3: 1.2357
Consider staying bullish over 1.2670 to target 1.2770. Afterwards, selling can be seen below 1.2770.
USD/JPY - BOJ Keep Policy Steady
USD/JPY declined further to 107.62. This morning, the Bank of Japan kept its monetary policy (rates at -0.10% and 10-year government bond yield target at about 0%) and forward guidance unchanged as expected.
Technically, the U.S. dollar is correcting up versus the Japanese yen. USD/JPY managed to rise above the 50-period M.A. on H4 and get above the highs of last week.
Support and Resistance
R3: 109.34
R2: 108.75
R1: 108.42
Key Trading Level: 108.16
S1: 107.82
S2: 107.57
S3: 106.97
Recalling our previous update, USD/JPY Peaking Out of Sideways, the pair has traded in line with our forecast and stayed bearish below 108.21. For now, we may see a bullish retracement above 107.550 until 107.950 and 108.250 later. All the best!
