Markets continue to stay in familiar range after ECB and BoE left rates unchanged while US jobless came miss expectations. ECB left rates unchanged at 1% for the 16th consecutive month as widely expected. President Trichet said in the press conference that current raters are appropriate and expects price developments to remain moderate. Economic data in Q3 were so far better than expected but Trichet warned again that recovery will be moderate and uneven. After all, there is no change in markets' expectation that ECB is in no rush to remove policy accommodation any time soon.

BoE left ranges unchanged at 0.5% and kept the asset purchase program unchanged at GBP 200b today. The statement was brief with no details. Focus will turn to the quarterly Inflation Report to be released on August 11 and minutes to be released on August 18.

SNB's currency reserves dropped to CHF 219.3b by the end of July, comparing from CHF 224.9b by the end of June. This is inline with SNB's messages that it suspended currency intervention earlier in Q2.

IMF and EU said today that Greece has made remarkable progress in implementing the austerity program hailed the program has made a strong start. Greece has got the EUR 110b first installment of the rescue package earlier and is expected to receive the second installment of EUR 9b by September 13.

Data released in US session saw jobless claims rose back to three month high at 479k level. Though, continuing claims dropped by 34k to 4.54m. Canadian building permits beat expectation and rose 6.5% mom in June.

Employment data released from New Zealand was very poor. The job market unexpectedly contracted by -0.3% qoq in Q2 versus expectation of 0.5% expansion. Unemployment rate jumped sharply from 6.0% to 6.8%, versus expectation of 6.2%. RBNZ has stated that the tightening cycle will be slower than it thought in June. Considering the poor employment outlook, and a tamer than expected Q2 CPI of 1.8% yoy as released in mid July, RBNZ would likely be on hold for longer, as least after getting Q3 data.

GBP/USD Mid-Day Outlook

Daily Pivots: (S1) 1.5838; (P) 1.5900; (R1) 1.5945; More.

GBP/USD is still staying in consolidation below 1.5967 for the moment. Deeper retreat could be seen to 4 hours 55 EMA (now at 1.5704) and below. But still, recent rally should still be in progress as long as 1.5546 cluster support holds (which is close to 50% retracement of 1.5123 to 1.5967 and 23.6% retracement from 1.4230 to 1.5967). Sustained trading above 61.8% retracement of 1.7043 to 1.4230 at 1.5968 will pave the way to retest 1.7043 resistance next.

In the bigger picture, current rise from 1.4230 is treated as the third leg of the whole medium term consolidation pattern that started at 2009 low of 1.3503. Further rally would now be seen towards 1.7043 resistance and possibly above as the consolidation continues. However, we'd expect strong resistance between 1.7043 and 50% retracement of 2.1161 to 1.3503 at 1.7332 and finally bring long term down trend resumption. On the downside, break of 1.5123 support will argue that rise from 1.4230 has possibly completed earlier than we thought and will turn focus back to this low.

GBP/USD

GBP/USD