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EUR/GBP recovers to 5-DMA after BOE rate decision

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Dec 10, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Mumbai) - Sterling suffered moderate weakness, helping the EUR/GBP pair trim losses to trade around the 5-DMA located at 0.7225 after the Bank of England (QE) left policy tolls unchanged.

    BOE – No surprises

    The BOE MPC voted 8-1 to keep rates unchanged as expected and once again reiterated low inflation in the short-term. However, the minutes noted the nominal wage growth appears to have flattened due to lesser working hours.

    This may have weighed over Sterling and helped the EUR/GBP pair trim losses to trade around the 5-DMA. With the BOE event out of the way, the focus now would be on the US stock markets and the resulting demand for the safe havens/risk assets.

    EUR/GBP Technical Levels

    At 0.7225, the pair could rise to 0.7237 (50% of 0.7493-0.6981), above which the gains could be extended to 0.7261 (daily high), which, if taken out could open doors for 0.7278 (38.2% of 0.6931-0.7493). On the other hand, a break below 0.7212 (50% of 0.6931-0.7493), would expose the confluence of 100-DMA and 200-DMA at 0.7203-0.7198.
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