EUR/GBP retreats after reaching 1-week highs

EUR/GBP retreats after reaching 1-week highs

6 July 2017, 18:07
Roman Vashchilin

EUR/GBP continues to move on Thursday with a bullish bias on the back of a stronger euro across the board. The pair reached at 0.8817 a fresh weekly high. Then pulled back and currently is trading slightly above 0.8800. 

Earlier today, the euro fell to the lowest in two weeks against the pound but it was able to bounce sharply to the upside. It bottomed at 0.8755 and from the lows rose more than 50 pips. 

The minutes of the latest European Central Bank meeting boosted the euro. According to the document, official discussed at the June meeting, removing the easing bias. If the inflation outlook improves, the current purchase program could be revised. The relatively modest hawkish tone of the minutes, benefit the euro that rose in the market. EUR/USD rose toward 1.1400 while EUR/CHF reached 1.0983, the highest level since May 12. 

ECB: Longer-term inflation expectations in the euro area remained broadly unchanged

Levels to watch 

A consolidation on top of 0.8810 could give momentum to the euro to extend gains. The next resistance is seen at 0.8835 (Jun 14 high) and 0.8865 (Jun 12 high). On the downside, the immediate support is the 0.8800 area, followed by 0.8780 and the key 0.8755 area (Jul 3 & 6 low). A break below the last one, would be a strong bearish signal. 

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