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EUR/GBP spikes on falling prospect of aggressive ECB easing

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Mar 4, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    The buying interest in EUR spiked, taking the EUR/GBP cross higher to 0.7761 on reports that ECB may not do much next week other than the already priced-in 10 bps deposit rate cut.

    Eyes hourly 100-MA

    The cross is just a few pips short of the hourly 100-MA located at 0.7767 levels. The common currency recovered from the daily lows after MNI report said the ECB governing council has not consensus beyond a 10 bps rate cut.

    Markets have been speculating about more aggressive easing next week – expansion of QE program. Moreover, the German bond markets have already priced-in a 10 bps rate cut. Consequently, MNI report pushed the pair higher.

    Still, the gains in the cross are being capped around 0.7760 levels.

    EUR/GBP Technical Levels

    The immediate hurdle at 0.7767 (hourly 100-MA), above which the cross could make an attempt at 0.7812 (10-DMA). A break higher would expose 0.7845 (Feb 17 high). On the other hand, a break below 0.7730 (hourly 50-MA) could see the pair drift lower to 0.77, under which a major support is seen at 0.7634 (50-DMA).
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