The Fed Leaves Policy Unchaged. BoE Takes Centre Stage

The Fed Is Feeling Comfortable

Yesterday, as it was expected, the interest rates were held at the same level, between 2.25% and 2.50%. The Fed was quite happy with how things are progressing in the US economy, even though inflation is still on the lower side of their 2% target. It was pointed out that the expansion of the economic activity is still sustained, and unemployment is at its lows.

China-US Are Having A Productive Dialogue

According to representatives from both sides, the recent round of trade talks has been seen as a productive one. China and the US have agreed partially on how to proceed with a few sets of tariffs that are taking effect right now. A few key notes to take from the negotiations are, that the US would remove a 10% tariff on the $200 billion worth of imports from China immediately after the deal goes into effect. Some other 10% tariffs would be lifted at the second stage, whereas the 25% tariffs on $50 billion Chinese goods could be revised after the US presidential elections in 2020.

BoE Will Take Center Stage Today

The central bank torch will be passed to the Bank of England, which is also expected to stand pat. This will be one of the “bigger” meetings, where apart from the decision, the statement and the minutes, we also get the quarterly Inflation Report and a press conference by Governor Carney.

GBP/JPY — Technical Outlook

Last week, after rebounding from the lower side of the range, which is between the 143.80 and 148.40 levels, GBP/JPY continued to grind higher this week. The pair managed to break above some of its key resistance areas but was recently held near the 145.70 barrier. In our view, there might be a chance to see a bit of retracement back down, but if the bulls are still feeling confident, the move lower could be seen as a temporary correction, before another leg of buying.

EUR/AUD — Technical Outlook

From the beginning of this week, EUR/AUD keeps climbing higher, trading above its short-term upside support line taken from the low of April 19 th. From the beginnig of January, the rate was below its downside resistance line drawn from the peak of January 2 nd, which got broken on April 22 nd, opening the door for the pair to some higher levels. Looking at the 4-hour chart, EUR/AUD could correct a bit lower, given that it is trading slightly below the key resistance, at 1.5959. But as long as the pair trades above the aforementioned upside line, we will remain positive, at least for a while.

As For The Rest Of Today’s News

During the European morning, Eurozone’s final manufacturing PMI for April and Germany’s retail sales for March are due to be released. The bloc’s final manufacturing print is expected to confirm its preliminary estimate, while Germany’s retail sales are anticipated to have slid 0.5% mom in March after rising 0.9% in February. From the US, we get the Unit Labor Costs index for Q1 and factory orders for March.

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JFD is a leading Group of Companies offering financial and investment services and activities.