EUR/GBP Climbs to Session High ahead of BOE Super Thursday

EUR/GBP Climbs to Session High ahead of BOE Super Thursday

12 May 2016, 10:06
Roberto Jacobs

EUR/GBP Climbs to Session High ahead of BOE Super Thursday

As the Europeans trading session gets underway, the EUR/GBP pair spiked to Wednesday's high level of 0.7919 ahead of the key event risk for the British Pound, the BoE's Super Thursday.

Although, the Bank of England is expected to stand pat on interest-rates, sterling bulls seems to turn cautious as the central bank will also release the Quarterly Inflation Report, which could turn out to be a major fundamental driver for GBP pairs in the near-term.

Meanwhile, the shared currency also struggled to find direction ahead of the Euro-zone industrial production data for the month of March. The overall Euro-zone industrial production is expected to have rebounded with expectations of a nominal 0.1% growth after contracting by 0.8% in February.

From technical perspective, the pair has been oscillating within a broad trading range between 0.7925 resistance and 20-day SMA support near 0.7865. Only a decisive break-through beyond the well-established trading range would assist traders in determining the pair's near-term direction.

Technical levels to watch

Move above 0.7925 is immediately followed by resistance at a three-week high resistance near 0.7947-50 area. On a sustained strength above 0.7950 now seems to pave way for further near-term appreciation for the pair towards reclaiming the very important 0.8000 psychological mark resistance.

Meanwhile, a reversal from current resistance and leading to a momentum back below 0.7900 handle would reaffirm the pair's near-term range-bound move, taking it back to 20-day SMA support near 0.7865-60 region. A decisive break through 20-day SMA support is likely to drag the pair immediately towards 0.7825 intermediate horizontal support ahead of its next major support near 0.7785 level.


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