- EUR/GBP peeps above 0.8903 (100-day MA).
- Hawkish ECB keeps EUR well bid.
ECB December meeting minutes released yesterday stressed the need for forward guidance to evolve gradually if the economy continues to expand and inflation rises further toward the Governing Council’s aim. The minutes also said that forward guidance could be revisited early in 2018.
The market responded by sending EUR higher across the board. EUR/GBP jumped to a high of 0.8912 yesterday before closing the day at 0.8885. However, the pair regained bid tone about an hour ago and moved to a session high of 0.8908.
As of writing, the cross is trading above the downward sloping 100-day MA of 0.8903, but struggling to build momentum. Moreover, most analysts are calling for caution on the part of the EUR bulls as ECB could always postpone policy tightening if the economy does not hold up as expected.
EUR/GBP Technical Levels
A close above 0.8924 (Jan. 4 high) could yield a rally to 0.8982 (Nov. 28 high) and 0.90 (zero levels). On the downside, breach of support at 0.8882 (session low) would shift risk in favor of a deeper pullback to 0.8855 (50-day MA) and 0.8826 (200-day MA).
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