Bank of England in focus

Thursday 4 August

Mixed risk sentiment agin this morning with equity markets off their highs. Gold is still underpinned while oil is in retreat again as the jury remains out.

BOE decision today becomes the focus not only for GBP traders but CB watchers generally. More and more expectations this week of a 0.5% hike and some playing around with gilt purchases. I think we can rule out 0.75% but never say never these days. The Pound's recent rise generally will not have gone unnoticed by the MPC but neither will some soggy data too. Bailey has made previous comments alluding to recession helping curb spending and hence cap price rises/inlfation while standing poised to to act if inflation remains an issue. I expect more of the same today but in any case remain poised to sell post-BOE rallies. As always keep an eye on the voting numbers.

As always, don't over-analyse but be ready with your preferred levels/strategy, place orders and let the algos do the heavy work. Discipline is key as always but equally hesitation can often ruin a great idea.

GBPUSD: Capping around 1.2200 now after holding 1.2100 in the extended retreat and I will stand poised for rally resells but patience a virtue still. BOE awaited ofc. EURGBP: Still holding 0.8350 but failure into 0.8380-85 this time aas we wait on the BOE. I still think we'll see two-way pips jobbing opportunity. GBPJPY: A hold of 162.00-25 and now edging higher to 163.25 with USDJPY once again finding dip demand. Should see some two-way business around BOE.

EURUSD: Support at 1.0120 this time after another retreat amid the USD demand/soft EUR but sellers including me still poised. Option interest in play again today.USDJPY: Capping int0 134.50 and another knock lower in Asia from the model sellers that have been arriving around the same time in recent sessions but nowe back up to 134.25 amid the USD demand and better risk JPY supply.EURJPY: Broken 136.50 this morning after the solid rally from 135.50 but sellers poised still whenever risk turns amid general EUR weakness.USDCHF: We've support now at the 0.9600 resistance amid the general USD demand/EURUSD cap and with SNB keeping an eye on things seemingly as EURCHF finding decent support too.EURCHF: A hold of the old 0.9760 resistance with SNB watching/smoothing and another rally since to look at 0.9785 as I type but sellers poised amid the variable risk and EUR weakness overall.

AUDUSD: Support back in at 0.6920 and then 0.6940 as metal prices improve and AHUDJPY demand kicks in again and now testing 0.6975. GBPAUD capping at 1.7600 then 1.7550 as AUDUSD rally. NZDUSD holding 0.6220 area yet again and now testing 0.6300 as I type helped by the better risk tones. GBPNZD holding 1.9280 in extended retreat after capping at 1.9450 . USDCAD: Capping 1.2880-90 again with some CADJPY demand returning but holding 1.2830 amid oil price retreat.

Let's continue to be careful out there.

Interbank rates: 08.43 BST

GBPUSD 1.2173

EURUSD 1.0178

EURGBP 0.8362

GBPEUR 1.1958

GBPJPY 163.27

GBPCAD 1.5638

GBPCHF 1.1687

GBPZAR 20.4147

GBPHKD 9.4804

USDJPY 134.13

EURJPY 136.54

EURCHF 0.9786

EURHKD 7.9281

AUDUSD 0.6969

USDCAD 1.2845

USDCHF 0.9614