• A more dovish ECB tilt prompts some fresh selling around the shared currency.
• Some GBP profit-taking seemed to extend support and help limit deeper losses.
As the ECB post-meeting presser got underway, the selling pressure surrounding the shared currency picked up the pace and dragged the EUR/GBP cross to fresh 2-1/2 month lows.
The cross did attempt a minor recovery during the early European session but was quickly sold into near the 0.8725 region following the disappointing release of flash Euro-zone PMI figures for January.
Meanwhile, the latest leg of a sudden fall over the past hour or so came in reaction to a more dovish shift by the ECB President Mario Draghi, saying that risks to Euro-zone growth outlook have moved to the downside.
Draghi was also noted saying that underlying inflation remains muted, which further collaborated towards denting the already weaker sentiment and dragged the cross to an intraday low level of 0.8682, the lowest since Nov. 14.
However, the ongoing profit-taking slide in the GBP/USD major, especially after this week's strong upsurge, seemed to lend some support and turned out to be a key factor that helped limit further downside, at least for the time being.
Technical levels to watch
Immediate support is pegged near the 0.8665 level, which if broken will mark a fresh near-term bearish breakdown and pave the way for an extension of this month's sharp rejection slide from the 0.9100 handle. On the flip side, the 0.8725-30 region might continue to cap any attempted recovery and is followed by the 0.8760 supply zone, above which the cross is likely to aim towards reclaiming the 0.8800 handle.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD hold comfortably above 1.0750 as USD recovery loses steam
EUR/USD clings to small daily gains above 1.0750 in the early American session on Monday. In the absence of high-tier data releases, the US Dollar finds it difficult to gather recovery momentum and helps the pair hold its ground.
GBP/USD range bound around 200-DMA, awaiting BoE’s decision
The Pound Sterling registers anemic losses against the US Dollar as traders brace for the Bank of England’s (BoE) monetary policy decision on Thursday. The pair remained within the 1.2529-1.2594 boundaries during the last few days, capped by key support and resistance levels. The GBP/USD trades at 1.2556, down 0.04%.
Gold eases toward $2,310 amid a better market mood
After falling to $2,310 in the early European session, Gold recovered to the $2,310 area in the second half of the day. The benchmark 10-year US Treasury bond yield stays in negative territory below 4.5% and helps XAU/USD find support.
Ripple lawsuit develops with SEC reply under seal, XRP holders await public redacted versions
Ripple lawsuit’s latest development is SEC filing, under seal. The regulator has filed its reply brief and supporting exhibits and the documents will be made public on Wednesday, May 8.
The impact of economic indicators and global dynamics on the US Dollar
Recent labor market data suggest a cooling economy. The disappointing job creation and rising unemployment hint at a slackening demand for labor, which, coupled with subdued wage growth, could signal a slower economic trajectory.