EURGBP staring at 0.72 (Over to ECB and BOE)

Later today both ECB and BOE announce their interest rate decisions and, whilst unlikely to see any changes, the statements could make or break EURGBP.

It is highly unlikely we will see a change from either Central Bank but the accompanying statements (and the subsequent Q+A, in the case of ECB) is likely to cause some large moves.

BOE pointed out that despite an expectation for growth to pick up later in the year they have not ruled out a further rate cut. Whilst unlikely to happen today, we can safely assume that if this does come to fruition that we can expect a bearish jolt across GBP crosses. This will see EURGBP bounce higher form the multi-year lows, assuming Draghi doesn't push it down himself of course.

The bounce from 0.72356 low does leave potential for a Double Bottom to form but a break above 0.730-34 resistance zone is required to confirm. There are several levels of resistance around here so I would not expect it to break upon first attempt. If we see a bounce higher towards 0.728 I would expect bears to fade into this area to assume a break below the multi-year lows.

If we see a Hawkish statement from BOE today then we're likely to see direct losses to test the lows.

As for ECB it is extremely unlikely to see a further rate reduction as we approach the vast QE programme. The Q+A is likely to be the main driver for Euro crosses as Draghi will likely be scrutinised further about details of the program.

At this stage, due to the bearish momentum and trend and weak Euro outlook (from QE and fundamentals) then I suspect it only a matter of time before we test 0.72, leaving it a question of how direct these losses may be.