The British pound posted a sharp increase after the Bank of England stated that negative rates are not coming in the foreseeable future. The main focus had been on the debate about the feasibility of negative interest rates and while the BoE stated that it is appropriate to get ready for negative rates if needed, they do not intend to signal that this policy tool will be implemented in the near-term. The central bank forecast that the U.K. economy is heading for a powerful rebound thanks to an aggressive push to vaccinate citizens. Furthermore, the inflation is expected to rise sharply towards 2 percent in spring.
This was enough for GBP/USD to jump from a low of 1.3565 to a high of almost 1.37. Technically, the pair is back in its sideways range where we pay attention to prices between 1.3750 and 1.3610.
EUR/USD: The euro succumbed to the dollar’s rebound and fell towards 1.1950. Traders should now focus on lower targets at 1.1930 and 1.19 from where we could see a reversal since the pair is in oversold territory.
DAX: The index was finally able to take out the 14030-barrier and could now be primed for a test of 14130. Above that level there are no significant resistances until 14350.
Today we have the Non-farm payrolls report scheduled for release at 13:30 UTC which is forecast to show that 100,000 jobs were added in the U.S. in January after a 140,000 drop in December. A stronger report could increase the buying pressure in the U.S. dollar.
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