Morning Brief: DXY under pressure while GBPUSD spikes after BOE

The GBPUSD is up by more than 0.30% as traders react to the Bank of England (BOE) interest rate decision. As was widely expected, the bank left interest rate unchanged at 0.10% and left its quantitative easing program intact.

The decision came two days after analysts at Bank of America predicted that the BOE will cut interest rate to zero and add more money to QE in the November meeting. They also expect that the bank will signal its willingness to move rates negative. Later today, Governor Andrew Bailey will possibly be asked about this during the press conference that will happen at 11:45 GMT.

GBPUSD technical forecast


Dollar index under pressure ahead of initial jobless claims data

The US dollar index (DXY) is under pressure ahead of the weekly jobless claims data that will come out at 12:30 GMT. Analysts polled by Reuters expect that more than 1.41 million people applied for initial claims in the previous week. That will be slightly below the 1.43 million that applied a week before. In total, the data will show that more than 55 million Americans have filed for claims during the current pandemic.

The jobless claims data will come a day before the Bureau of Labour Statistics will release the official nonfarm payrolls numbers. President Trump has already said that he expects the number to be big. However, going by the numbers released by ADP, the new jobs additions could be modest. In its report yesterday, ADP said that private payrolls increased by 167k in July. Nonetheless, I suspect that the dollar index will remain under pressure as bears attempt to move to 92.

US dollar index forecast

US dollar index

DAX index futures in the green after modest Siemens earnings

Futures tied to the DAX index are in the green as investors react to the upbeat earnings from Siemens, the biggest engineering firm in Europe. The index is up by 45 points while the CAC 40, FTSE 100, and Euro Stoxx 50 are down by 0.50%, 0.56%, and 0.28%, respectively. In its earnings release, Siemens said that its profit climbed by 8% in the third quarter.

EBITDA came in at 1.8 billion euros, which was higher than the analysts forecast of 1.2 billion euros. This growth was mostly because of a 62% increase in its software busines after the company raised the valuation of its Bentley Systems division.

The DAX index is trading at 12,650, which is within the range it has been this week. The price is above the short and medium-term moving averages. Also, it seems as if it is forming a bullish pennant pattern, which means that the price is likely to continue rising.

DAX index forecast

DAX Index

Gold price momentum accelerates

Gold price is up by 0.65% this morning as the price remains at its all-time high. Other metals are equally doing well, with silver price rising by more than 2% while platinum and palladium are up by more than 2%. I suspect that the positive momentum will remain today as gold attempts to test the next resistance at $2100.

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Gold Price chart

Gold Price

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