Bank of England meeting in September may be "Eagle and Dove intertwined"

Earlier Thursday, the market remained cautiously optimistic, assessing the Fed's cautious attitude towards further easing while preparing for the Bank of England's (BoE) policy of expected interest rate cuts later that day.

The US dollar (USD) continues to work hard on the recovery after the Federal Reserve incident, with the US S&P 500 futures rising about 0.30% so far. As of this writing, the U.S. dollar index is rebounding to 97.50, up 0.25% on the day.

The dollar fell to a three-and-a-half low of 96.22 against six major currencies www.qgrse.cnpetitors on Wednesday, after the Federal Reserve's summary of economic forecasts (SEP), the so-called dot chart, showed that Fed policymakers are expected to cut interest rates twice this year.

The Federal Reserve announced that it would cut interest rates by 25 basis points (bps) for the first time this year to 4%-4.25%.

However, after Fed Chairman Jerome Powell made cautious remarks about further rate cuts in a press conference after the policy meeting, the dollar quickly changed its trend and rebounded along with U.S. Treasury yields.

Powell noted, "Political actions to cope with weak labor markets and central bank risk management cuts are in a 'conference-by-conference' situation.

According to CME's FedWatch tool, despite prudent interest rate cuts, the market expects the possibility of the Fed's additional 25 basis points cuts in October at 87.7%, www.qgrse.cnpared with a 74.3% chance a day ago.

All eyes are now turning to the Bank of England policy announcement. Inflation levels and slowing UK wage growth in early 2024In the case, the market expects to reiterate its "gradual and cautious approach" to further cut borrowing costs after stabilizing the benchmark interest rate at 4%.

Basic market trends in the foreign exchange market:

The pound/USD continues to pull back from its more than two-month high of 1.3726, and is currently challenging the 1.3600 mark. Traders repositioned ahead of the risk of the Bank of England incident.

The euro/dollar also saw a correctional decline from its highest level in four years, trading around 1.1800, awaiting speeches from numerous European Central Bank (ECB) policymakers.

The USD/Canadian dollar hovered around 1.3800 early Thursday, digesting the monetary policy decisions of the Federal Reserve and the Bank of Canada (BoC). The Bank of Canada cut key interest rates by 25 basis points to 2.5%, the first rate cut since March as central banks take action to stimulate a weak economy.

The US dollar/Japanese yen rebounded strongly in the same period of the US dollar, and it is expected that Europe will continue to break through the 147.50 mark in the early trading session.

Meanwhile, the New Zealand Dollar/USD pair has remained behind so far as New Zealand (NZD) contracted 0.9% in the second quarter after rising 0.9% in the previous quarter.

Bulle market fundamentals:

Gold has expanded its pullback range to below $3,650, and buying on dips is expected to reappear at a lower level. Traders are looking forward to the U.S. initial jobless claims figures for new trading momentum.

Analysis of major currency trends:

Europe: Intraday deviation of the euro? The US dollar first turned neutral and is currently down. Some consolidation will first appear below the top of 1.1917 temporarily. As long as the resistance level of 1.1741 is turned into support, it is expected to rise further. Above 1.1917, it will return to a larger upward trend to the 1.2 psychological level. However, a firm breakthrough of 1.1741 should confirm a short-term peak and will tilt downward to the 1.1607 support level.

GBP: With the current decline, the intraday bias of GBP/USD first turned neutral, and some consolidation occurred below the temporary top of 1.3725. As long as the 55-day moving average (currently 1.3488) remains unchanged, further rises are expected. Above 1.3725, the 1.3787 high will be retested first. A decisive breakthrough will resume a larger upward trend and reach the forecast level of 1.4004. However, a continued breakthrough of the 55-day moving average will indicate that the correction pattern of 1.3787 is extending and extending to another downward line and further down to 1.3332 support and below.

Japanese Yen: USD/JPY intraday biasTurned to neutral and broke through the small resistance level of 147.25. The current rebound also makes the outlook messy. On the plus side, breaking through the 149.12 resistance level will indicate that the pullback from 150.90 has been www.qgrse.cnpleted and the rise from 139.87 is still in progress. There should be a further upward trend and then retest 150.90. On the downside, falling below 145.47 will resume falling to 142.66 support.

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