EUR/GBP spikes to 0.8570 after BOE announcement

The EUR/GBP cross reversed inital knee-jerk reaction to 0.8512 and jumped to fresh session peak after BoE monetary policy decision.

The British central bank maintain status quo and left it official rate at a historic low level of 0.25% and asset purchase target at £435 billion. Meanwhile, the keenly watched Quarterly Inflation Report showed inflation outlook remained largely unchanged, which could have disappointed the market and attracted some selling pressure around the British Pound.

The initla reaction, however, has been relatively muted as investors now look forward to the BoE presser, where Governor Mark Carney's comments on the current resilience in the UK economy would be closely scrutinize to see if the downside risks still remains.

Technical levels to watch

On a sustained move above 0.8550 level, the cross seems to head back towards 0.8580 intermediate resistance, en-route 0.8600 handle, which if conquered should extend the upward trajectory towards 100-day SMA resistance near 0.8650-55 region.

Meanwhile on the downside, 0.8500 psychological mark now seems to have emerged as immediate support below which the cross is likely to head back towards Jan. monthly lows support at 0.8450 level.

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