EUR/GBP soars to 2-week highs as Pound slides on Carney’s comments

Pound tumbles on BoE Carney’s comments.
EUR/GBP correction gained speed signaling a potential bottom.

Matías Salord FXStreet

The EUR/GBP pair jumped from below 0.8700 to 0.8769, in less than 60 minutes hitting the highest level since April 2. The moved was driven by a sharp slide of the pound across the board following comments from Bank of England Governor, Mark Carney.

Near the end of the session, the pair was hovering around 0.8760, with the pound consolidating losses across the board. Earlier today, weak UK retail sales data did not affect significantly the currency that was hit by comments from Carney.

BoE Governor spoke about higher rates in the future and warned about Brexit risks. He also mentioned some mixed economic data. Not big surprises from Carney, but his tone weakened the pound.

EUR/GBP Technical outlook

Yesterday the pair broke a downtrend line from March highs. Today made a pullback and resumed the upside. The chart points to the upside, points to the upside, but after rising more among 150 pips since Tuesday, some technical indicator could start showing overbought readings. If it ends around current levels it would be the biggest 2-day rally in months.

The rally pushed the price above the 20-day moving average (0.8720) adding more support to the euro. If the upside continues, the next strong resistance might be seen at 0.8785 and then 0.8830.

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

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