Daily Market Report - Thursday, Aug 03, 2023


The British Pound and UK shares traded lower Thursday Morning ahead of the Bank of England meeting outcome. The BOE Monetary Policy Statement is set to be released at 11:00 GMT. Along with this release will see Governor Bailey's press conference 30 minutes after at 11:30. The central bank expected to increase the Bank Rate by 25 bps, a decision to raise rates today will be the 14th consecutive rise by the Bank.

The British pound struggling to regain upside momentum against the US dollar and Euro. GBPUSD hit a fresh 4-week low. As of this writing, the currency pair tinkered around just below the 1.2650 handles. The strong bearish sentiment is driven by a strong dollar and bets that the BOE might soon pause its interest rate hiking cycle. Cooling inflation sparks expectations of a rate-hike pause. In June, the inflation rate in the UK declined to 7.9%, the lowest level since March 2022, although this still remains significantly above the central bank's target of 2%


US stock futures are clawing back some of the early losses. However, the overall momentum remained bearish throughout the last two trading sessions after Fitch downgraded the long-term credit rating of the U.S. Moving ahead to the North American session, investors should closely monitor the release of ISM PMI data and earnings results from Apple and Amazon. Both companies are scheduled to report earnings after the closing bell today.


Crude oil prices remain under pressure following the previous session’s steep fall after a surprise downgrade to U.S. Treasuries by Fitch Ratings turned investors away from seemingly riskier assets and drove them to safe havens. Meantime, the recent EIA inventory data showed the US crude inventories declined by about 17 million barrels last week, far exceeding market expectations for a 1.367-million-barrel draw. The key data for the oil prices rest of this week will once again be the movement of the US dollar and the key economic data from the US.


In the currency market, the dollar index hovers near the key trendline. Looking further ahead to the US session, the US jobless claims, ISM services PMI and factory orders could influence the market mood. While EURUSD struggles for clear directions as it seesaws near the lowest levels in 4- weeks. The sustainability of any gain in the currency pair in the coming days will largely depend on how the US dollar behaves.


The safe-haven metal weakened to around $1,930 an ounce on Thursday, sliding back towards the lowest levels in over 3 weeks, weighed down by a rallying dollar. However, the metal slightly recovered from the early lows boosted by a context of risk aversion. So far today, the downside sentiment was limited despite a sharp jump in the US currency, which would usually weigh on demand for the greenback-priced bullion.

Economic Outlook

On the data front, the US reported a better-than-expected ADP employment report. Private sector companies in the US added a robust 324,000 jobs in July, surpassing economist expectations of 189,000 jobs, according to ADP's monthly employment report.

Moving ahead today, the important events to watch:

UK – BOE interest rate decision and statement: GMT – 11:00

US – ISM services PMI: GMT – 14:00

Technical Outlook and Review

The currency pair trading near the critical demand zone on the daily time frame. So, the pair may find buyers near 1.0900. On the downside, the bears need to see a confirmed break below the next crucial support area of 1.0870 for further downside. A break below 1.0870 will confirm a possible move to 1.0830 and 1.0810.

The important levels to watch for today: Support- 1.0900 and 1.0870 Resistance- 1.0950 and 1.0980.

GOLD: For today the first support for the Gold appears to be around $1930, in the short-term any break below $1930 the next downside level is to watch $1924/20. On the upper side, the immediate resistance around $1942 then 1946 any break and close above 1946 will open at $1954/56 minimum.

The important levels to watch for today: Support- 1930 and 1924 Resistance- 1946 and 1956.

Quote of the day “Although it’s easy to forget sometimes, a share is not a lottery ticket… it’s part ownership of a business.” – Peter Lynch.
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