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EUR/GBP firmer, eyes 0.7900 ahead of BoE

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Mar 17, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    EUR/GBP keeps its buoyancy intact in the second part of the week, now testing session highs in the vicinity of the key barrier at 0.7900.

    EUR/GBP in 2-week highs

    The European cross is advancing for the second consecutive week so far, bolstered by the recent and deep pullback in the sterling and the reticent tone seen in the single currency, all amidst increasing risk appetite sentiment following yesterday’s dovish statement from the FOMC.

    GBP will remain under pressure ahead in the day, as the BoE MPC meets later. However, market bets of any surprise by the ‘Old Lady’ remain close to zero, while another unanimous vote favouring an ‘on hold’ stance is expected.

    On this side of the Channel, EMU’s final inflation figures for the month of February are expected to match the preliminary prints.

    EUR/GBP key levels

    The European cross is now up 0.25% at 0.7891 and a break above 0.7901 (high Feb.11) would expose 0.7931 (2016 high Feb.25) and then 0.8000 (psychological handle). On the flip side, the immediate support aligns at 0.7801 (20-day sma) ahead of 0.7693 (38.2% Fibo of 0.7310-0.7931) and finally 0.7683 (55-day sma).
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