- Summary:
- EURGBP retreat today from seven month highs after the Bank of England's Monetary Policy Committee voted to cut the Bank rate to 0.1%
The EUR to GBP retreat today from seven-month highs after the Bank of England’s Monetary Policy Committee at a special meeting voted to cut the Bank rate to 0.1% and increase its holdings of UK government and corporate bonds by £200 billion.
Earlier today, ECB announced an extensive QE programme. Euro is under pressure across the board today, as the ECB will buy corporate and government bond’s up to 750 billion in an emergency move to combat the coronavirus outbreak impact. The British pound was under extreme selling pressure the previous days as investors worry that the UK is lagging to response to the coronavirus outbreak.
On the economic data front today, the German IFO Business Climate dropped to 87.7 in the preliminary reading for March 2020. Clemens Fuest, of IFO institute, said that the German economy might shrink by 6% due to the coronavirus outbreak. Earlier this week, the ZEW Current Conditions Index dropped to -43.1 from -15.7, and the Economic Sentiment Index slumped from 8.7 to -49.5.
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EURGBP Price Resistance and Support
EURGBP is 1.33% lower at 0.9259, as the pair corrects from the recent rally that started on February 19. The outlook is bullish despite today’s correction and only a close below 0.91 can cancel the recent bullish momentum.
On the upside, immediate resistance stands at 0.9499 the daily top. A break above might challenge the next resistance at 0.955 psychological mark.
On the other side, first support for the pair stands at 0.9223 the daily low. Next support for EURGBP will be met at 0.9071 the low from March 18 while more bids might emerge at 0.8982 the low from March 16.