Midday Market Update: Midday Market Update: BOE Rate Decision in Focus

The markets experienced mixed sentiment as investors eye the BoE interest rate decision scheduled for the early New York session. The Dollar Index surged following Fed Chair Powell’s comments, Wednesday evening at the FOMC meeting. There will be a release of US Initial Jobless Claims, Manufacturing PMIs, and a couple of Central Bank speakers including BoE Governor Bailey.

The dollar dented Pound strength ahead of the BoE policy meeting. The GBPUSD plunged by -0.47% as the BoE is set to keep their interest rates unchanged. The dollar remains resilient despite the Fed leaving rates unchanged on Wednesday. The Pound is currently trading near the 1.26121 support level and a hold above that level could see bulls target the 1.2700 level. Investors shift their focus to the Initial Jobless Claims and Manufacturing PMIs.

EURGBP soared by +0.31% despite mixed European economic data. The Euro advanced following better-than-expected CPI yoy for January which came in at 2.8% vs 2.7% expected. European summit and central bank meetings are a major tailwind for Euro buyers. Upside gains are capped by the 0.8565 level, which on the downside, 0.8514 remains a key support level. ECB President Lagarde will be speaking early New York session along BoE policy meeting.

AUDUSD plunged by -0.83 for the second day as Fed cuts unwind. The Australian dollar suffered losses early Thursday as Building Approvals (MoM) for December dropped to -9.5% vs 0.5% anticipated. This huge surprise underpinned weakness in the Australian dollar ahead of key US economic data. The AUDUSD is currently trading below the 0.6525 level, a key support level and a further drop could cause weakness toward the 0.6500 level.

US Equity futures recovered following the Wall Street sell-off after the Fed held rates unchanged. The US100 was up by +0.45% from the 17119.4 level and bulls are challenged by the 17382.2 level. The US30 was largely flat in the European session as trading remained rangebound between 38245.83 resistance and 38124.06 support level. US500 was up +0.34% and key levels to watch out for are 4841.2 low and 4872 high.

European Indices were mixed ahead of the BoE policy meeting. The UK100 soared by +0.74% from the 7600 psychological level and on the upside, 7689.5 remains a major hurdle for the index. CAC40 was down -0.48% as bulls lost steam above the 7653.7 level and the next key level to watch out for is the 7488 support level. DAX lost -0.22% as the index retraced from an all-time high at 16966.51 level. On the downside, 16781.43 remains a near-term target for sellers. In commodities, Both Brent (UKOIL) and West Texas Intermediate (USOIL) rebounded as investors closely watched the OPEC+ meetings. The USOIL was up +0.91% from the 75.81 low and key resistance is at 77.00 level. UKOIL surged by +0.88% as bulls pushed to reclaim the 81.57 level after finding near-term support at 80.43 levels. The OPEC+ production decision will greatly influence global energy demand.