Pound Gains on Jobs Data, Awaits PMIs; BoC Decision in the Spotlight

China Virus Fears Ease, Pound Gains on UK Jobs Data

The dollar traded higher against most of the other G10 currencies on Tuesday and during the Asian morning Wednesday. It gained the most against NOK, AUD and CHF in that order, while it underperformed only against GBP, and slightly versus SEK.

GBP/NZD — Technical Outlook

After rebounding from the short-term upside support line drawn from the low of December 27 th, GBP/NZD is once again approaching its key resistance barrier, at 1.9839, which is currently the highest point of January. We need a clear break above that area first, before examining a further move to the upside, hence why we will remain cautiously bullish for now.

Will the BoC Maintain its Neutral Stance?

As for today, the highlight may be the BoC interest rate decision. At its last meeting, the Bank kept interest rates unchanged, noting that there is nascent evidence that the global economy is stabilizing and that it is appropriate to maintain the current level of the overnight rate target. The key message was that officials have quickly switched back to neutral after flirting with the idea of easing at the prior gathering.

AUD/CAD — Technical Outlook

AUD/CAD is trading below a newly-established short-term tentative downside resistance line taken from the high of December 31 st. Although the path of least resistance lies slightly more to the downside, we will not exclude a possibility to see a small correction up before another leg of selling, hence why we will stay somewhat bearish, at least for now.

As for the Rest of Today’s Events

From the US, we get existing home sales for December, with the forecast pointing to a 1.3% mom increase, after a 1.7% slide in November.

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