BoE holds pat on rates, U.S. inflation eases

The Bank of England and the ECB’s monetary policy meetings were held yesterday. Both the central banks left interest rates unchanged as widely expected. The BoE was seen preparing the markets for a no-deal Brexit. The Governor, Mark Carney will be extending his term as the central bank’s governor until 2020.

Meanwhile, the ECB’s meeting did not offer many clues. The reaction from the euro was also muted although the currency jumped following the ECB’s release of the monetary policy decision.

On the economic front, the consumer price index data for August showed that inflation advanced at a pace of 0.2% on the month. This was below estimates of a 0.3% increase. On a year over year basis, U.S inflation rate advanced 2.7% in August. This was slower than the 2.9% increase in July.

Earlier today, data from China showed that industrial production increased 6.1% on the year. Retail sales rose 9.0% beating estimates of an 8.8% increase.

The European trading session will start with the trade balance figures coming out. This is followed by the Bank of England's Mark Carney speaking.

The NY trading session will see the release of the retail sales numbers. Headline retail sales are forecast to rise 0.4%, slightly down from 0.5% increase from the month before. Core retail sales are forecast to rise 0.5%. The data is followed by import prices and industrial production figures.

EURUSD intraday analysis

EURUSD (1.1691): The EURUSD currency pair pushed higher on Thursday. The gains came on the back of the ECB's monetary policy meeting. price action was seen breaking past the resistance area of 1.1626 - 1.1656 level. Any pullback is likely to be limited to this resistance which could act as support. This would keep the upside bias as the currency pair targets 1.1730 resistance level. In the event that EURUSD slips below failing to establish support, we could expect the ranging price action within 1.1656 - 1.1540 to continue.

GBPUSD intraday analysis

GBPUSD (1.3112):The GBPUSD currency pair posted a brief retest near the double top resistance level of 1.3034 before pushing higher. We expect the continued gains to keep GBPUSD on target toward 1.3205. It would be critical for the currency pair to establish a firm support at 1.3034. Failure to do so could keep the currency pair at risk of a decline back to 1.2959 level.

XAUUSD intraday analysis

XAUUSD (1204.39): Gold prices attempted to post gains but price action fell back to the trend line. However, the reversal which came from the doji near the trend line could signal continued gains. Gold prices could potentially be testing the main resistance level at 1219.75. To the downside, the support at 1197.50 could be tested. A decline below this level could switch the bias back into a sideways mode.