EUR/GBP eyes 0.7650 as the ECB delivers

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Mar 10, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    The increasing selling pressure on the single currency is sending EUR/GBP to quickly break below the 0.7700 support and extend the drop to the mid-0.7600s.

    EUR/GBP in 5-week lows

    The European cross is testing multi-week lows following the surprising move by the ECB, lowering all of its benchmark rates and expanding its monthly purchases to €80 billion staring in April.

    The central bank cut the interest rates on the main refinancing operations, the deposit lending facility and the marginal lending facility by 5 bp, 10 bp and 5 bp, to 0.00%, -0.40% and 0.25%, respectively.

    The move has caught markets off guard, where ‘some’ further easing was nonetheless expected.

    EUR/GBP key levels

    The European cross is now down 1.03% at 0.7659 and a breakdown of 0.7639 (55-day sma) would expose 0.7600 (psychological handle). On the other hand, the next hurdle lines up at 0.7780 (20-day sma) ahead of 0.7931 (high Feb.25) and then 0.7977 (high Dec.1 2014).
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