EUR/GBP: consolidates the bid on the 0.84 handle, looking for a bullish close

Currently, EUR/GBP is trading at 0.8440, up 0.48% on the day, having posted a daily high at 0.8455 and low at 0.8395.

EUR/GBP is consolidating the bid looking for a close today above the hourly 200 smoothed sma while capped by the 10 and 20 dmas. The cross is benefitting from poor UK data from today and the potential of the ECB making adjustments to its forward guidance later this year while EUR/USD remains supported on the 1.08 handle. "ECB President Draghi’s comments to the Dutch parliament yesterday also conceded that downside risks had abated but stressed that it was too soon to consider an adjustment to monetary easing," explained analysts at Scotiabank. 

GBP/USD: needs more advocates for a rate hike - Scotiabank

Meanwhile, the pound dropped today after a less hawkish outcome from the BoE than the market had been expecting. The BoE left rates on hold at 0.25% along with QE unchanged at £435B. Governor Mark Carney said that the current monetary policy was appropriate while a weak sterling was the main reason behind the rising inflation. 

EUR/GBP levels

Analysts at Commerzbank explained that EUR/GBP’s near term outlook is negative. "EUR/GBP remains subdued, trading below the 55- and 200-day moving averages at 0.8550/97, resistance which is reinforced by the seven month resistance line at 0.8573. It is coming under downside pressure and while this caps, a retest of key support at 0.8334/04 is expected. If slipped through, the 0.8252 the July 2016 low would be in focus."