EUR/GBP falls to over 2-week lows post-BoE announcement

Haresh Menghani FXStreet

• BoE decides to hikes interest rates by 25bps to 0.75%.
• A unanimous vote provides a minor boost to the GBP.

The EUR/GBP cross extended its retracement slide from the 0.8900 neighborhood and dropped to over two-week low after the latest BoE monetary policy update.

As was widely expected and already priced in the market, the Bank of England raised its key lending rate by 25 basis points to 0.75%. However, a unanimous vote (9-0) might have surprised market participants and provided a minor bullish lift to the British Pound.

This coupled with a heavily offered tone around the EUR/USD major exerted some additional downward pressure and further collaborated to the ongoing downfall to mid-0.8800s.

Further downside, however, seemed limited, at least for the time being, as investors look forward to the BoE's Quarterly Inflation Report and the BoE Governor Mark Carney's comments at the post-meeting presser.

Technical levels to watch

A follow-through selling below 0.8840 immediate horizontal support has the potential to continue dragging the cross further towards testing the 0.8800 handle. On the flip side, 0.8875 level, followed by the 0.8900 handle might now act as immediate resistance levels, above which the cross could aim back towards 0.8955-60 supply zone.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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