EUR/GBP off lows, retakes 0.8370 ahead of BoE

EUR/GBP has managed to regain the 0.8370 area after bottoming out at 0.8350 in early trade.

EUR/GBP attention to BoE

Big day for GBP, as market participants expect the Bank of England to cut its benchmark rate by 25 bp to 0.25%, additional £50-£75 billion in its Asset Purchase Facility (currently at £375 billion) and a potential improvement in the Funding For Lending scheme (FLS).

Despite bets for extra easing have been building up since the last meeting, today’s outcome remains a close call, while opinions regarding the impact on the currency still remain pretty divided as there is room for disappointment by the central bank.

EUR/GBP key levels

The cross is now up 0.05% at 0.8372 facing the initial resistance at 0.8495 (high Aug.2) followed by 0.8627 (2016 high Jul.6) and then 0.8651 (high Aug.28 2013). On the downside, a breach of 0.8383 (23.6% Fibo of 0.7595-0.8627) would expose 0.8248 (low Jul.14) and finally 0.8233 (38.2% Fibo of 0.7595-0.8627).